BFinance glossary

Bank Guarantee

Quick definition

A bank's commitment to secure a payment.

Overview

A bank guarantee is a formal commitment by a bank to ensure payment to a third party if one of the contracting parties defaults. It is often used to minimise risk in commercial transactions.

Common Use Cases

Securing commercial contracts
Project financing
Property rentals
Import-export

Examples in Small Businesses

Ensuring a supplier gets paid
Guaranteeing an advance payment on an order
Securing a commercial lease

← Back to glossary

Overview

Common Use Cases

Examples in Small Businesses

Start Managing Your Finances for Free