It refers to the written commitment document with the nature of guarantee issued by the bank at the application of the customer. Once the applicant fails to repay the debt or perform the agreed obligations in accordance with the contract signed between the applicant and the beneficiary, the bank shall perform the guarantee liability.
1. As a guarantee, bank credit is easy to be accepted by customers; 2. The letter of guarantee is issued according to the business contract, but it is not attached to the business contract. It is a legal document with independent legal effect. When the beneficiary makes a reasonable claim under the guarantee, the guarantor must bear the responsibility of payment, regardless of whether the applicant agrees to pay or not, and regardless of the actual facts of contract performance. That is, the letter of guarantee is an independent commitment and basically a documented transaction business. Business type According to the different roles of the guarantee in the basic contract and the different guarantee responsibilities undertaken by the guarantor, the guarantee can be divided into the following types: Folded loan guarantee It refers to a payment guarantee commitment made by the bank to the lender at the request of the borrower to ensure that the borrower returns the principal and interest of the loan on schedule to the lender in accordance with the provisions of the loan contract. Folded financial lease guarantee It refers to a payment guarantee commitment issued by the lessee to the lessor by requesting the bank according to the provisions of the lease agreement to ensure that the lessee pays the rent to the lessor on schedule. Folding compensation trade guarantee Under the compensation trade contract, a guarantee made by the bank to the supplier of equipment or technology at the application of the importer of equipment or technology, which aims to ensure that the importer will offset the price and interest of the imported equipment and technology with the finished products or the proceeds from the export of finished products within a certain period after the introduction. Folded bid security It refers to the guarantee and commitment made by the bank to the tenderee at the request of the tenderer to ensure that within the validity period of the tenderer's quotation, the tenderer will abide by its promise, not withdraw the bid, not change the bid, not change the original quotation conditions, and will sign the contract with the tenderee within a certain period of time in accordance with the provisions of the bidding documents once it wins the bid. Folding performance bond It refers to a kind of performance guarantee commitment made by the bank to the buyer or the owner at the request of the supplier or labor contractor. Folding advance payment guarantee Also known as repayment guarantee or deposit guarantee. It means that the bank guarantees to the buyer or the owner at the request of the supplier or labor contractor that if the applicant fails to perform the contract or fails to use the advance payment in full according to the contract, the bank is responsible for returning the advance payment in the amount specified in the guarantee. Folded payment guarantee It refers to a payment guarantee commitment issued by the bank to the seller or contractor at the application of the buyer or the owner to ensure the payment of loan or progress payment of contracted project. Other types of guarantee include incoming material or incoming parts processing guarantee, quality guarantee, retention money guarantee, deferred payment guarantee, bill or expense guarantee, delivery guarantee, bail guarantee and customs duty-free guarantee, etc.