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Bank guarantees are a mechanism to secure payment of a stated maximum sum of money to a named party (usually called the beneficiary) in the event of non-performance or default by a party in the underlying relationship. Payment will be made by ANZ on presentation of a written demand for payment by the beneficiary. Bank guarantees substitute cash deposits with counterparties, freeing up working capital and potentially securing better contract terms.

There are two distinct types of bank guarantees, below. 

Performance guarantees 

Secure performance based, non-monetary obligations, where the beneficiary has a right to compensation in the event of non-performance. Providing a performance guarantee demonstrates to the contracting party that you are a reliable and sound business, with the ability and the financial strength to carry out the work you have been contracted for. Examples of Performance Guarantees include: Bid/Tender Bond, Performance Bond, Advance Payment, Warranty or Maintenance Bond.

Financial guarantees 

Secure financial obligations owed to the beneficiary. Providing a financial guarantee provides comfort to the beneficiary that you will be able to fulfill your financial obligations. Examples of Financial Guarantees include: Collateral Guarantee/SBLC, Financial Guarantee/SBLC, Rental Bond, Intra-Group Guarantee/SBLC, Utilities Bond.

More information

For more information on ANZ Trade and Supply Chain Finance solutions please contact the Trade Finance Desk via email or phone 1300 269 487. 

For more information on how ANZ can help you grow your business internationally please visit the ANZ Be Trade Ready site.


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