BANK GUARANTEE (BG)
Bank-Backed Assurance for Eligible Business Obligations
Explore Bank Guarantee facilities for eligible contractual, tender, performance and other approved business obligations.
- Facility: Non-Fund-Based BG
- Purpose: Contractual Assurance
- Type: As Required by the Underlying Contract
- Margin & Security: Bank-Specific
Overview
Financial Assurance for Eligible Contracts
Capital Yono assists eligible businesses in exploring Bank Guarantee facilities for contractual obligations that require an acceptable bank-issued undertaking. The proposed guarantee is evaluated against the underlying contract, beneficiary requirements, applicant standing, amount, validity, claim wording, margin and security requirements.
Eligible Use Cases
- Tender and bid security, where prescribed.
- Performance obligations under approved contracts.
- Advance-payment or other contractual guarantees, where eligible.
- Other bank-accepted business guarantees.
Preliminary Screening
A Bank Guarantee is generally a non-fund-based undertaking and should not be presented as an upfront cash disbursement. Invocation or other events may create reimbursement obligations under the agreed bank terms.
The issuing bank may review applicant financials, banking conduct, facility limits, contract/order authenticity, beneficiary details, required wording, guarantee tenor and proposed margin or collateral.
Documents to Keep Ready
- Entity KYC and authorisation; contract, tender or work order; beneficiary name and draft BG format; amount and validity; financials and banking; existing limits; proposed margin/security details where applicable.
FAQs
Can a BG be considered for a tender or performance obligation?
The bank may consider an appropriate type of BG based on the contract, beneficiary wording, applicant eligibility and required security.
Is a BG the same as a funded working capital loan?
No. A BG is generally a non-fund-based bank undertaking rather than an ordinary loan disbursement.
What decides the margin or collateral?
The issuing bank evaluates the applicant profile, facility structure, contract and its own credit policy before determining margin and security.
Can an existing BG facility be enhanced?
Eligible enhancement may be assessed against existing exposure, contract requirements and the bank’s appraisal criteria.
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Discuss Your Bank Guarantee Requirement
Share the underlying contract, required guarantee type and approximate amount for preliminary review.
Funding is subject to eligibility, appraisal, due diligence, approval and final terms from the relevant funding provider.