Leased Bank Guarantee
Understanding Leased Bank Guarantee A leased bank guarantee is a guarantee , which is leased to a third party for a specific fee by sblc providers . The issuing bank will conduct due diligence on the creditworthiness of the customer, looking to secure the bank guarantee. Following this it will lease a guarantee to that customer for a set amount of money and over a set period of time (typically less than two years). The issuing bank will send the guarantee to the borrower's main bank, and the issuing bank then becomes a backer for debts incurred by the borrower, up to the guaranteed amount. What You Need to Know About Leased Bank Guarantee Leased bank guarantees tend to be very expensive; fees can run as high as 15% of the guarantee amount every year. The fee usually consists of an initial setup fee and an annual fee, both of which will be a percentage of the dollar amount that the issuing bank "guarantees" (or covers) in the event that the company is not able t...