bank Guarantees

Being a leading Bank Guarantee providers in Dubai & India , we at Express Trade Finance, invite you to explore the world of Bank Guarantees, where financial security meets unparalleled peace of mind. Whether you’re a buyer seeking assurance or a seller safeguarding your interests, our innovative bank guarantee solutions are designed to elevate your business to new heights of success.

A bank guarantee is a financial instrument provided by a bank on behalf of a customer (typically a buyer or contractor) to a beneficiary (often a seller or supplier). It serves as a promise from the bank that the customer will fulfill their obligations under a contract or agreement. If the customer fails to meet these obligations, the beneficiary can make a claim against the bank guarantee to receive compensation for any losses incurred.

Bank guarantees are commonly used in various business transactions to provide assurance to the beneficiary that they will be paid or compensated if the customer defaults. They can take different forms depending on the specific requirements of the transaction, such as bid bonds, performance guarantees, advance payment guarantees, or payment guarantees.

Overall, bank guarantees play a crucial role in mitigating risks and providing financial security in commercial transactions, helping to build trust and confidence between parties involved in the transaction.

Types of Guarantees:

Performance Bond or Guarantee

A performance bond guarantee ensures that a contractor fulfills their contractual obligations. When entering into a contract, the project owner requires the contractor to obtain a performance bond. The contractor obtains the bond from a surety company or bank, which guarantees that the contractor will complete the project as agreed. If the contractor fails to perform, the project owner can make a claim against the bond. In such cases, the surety company or bank compensates the project owner for any losses incurred. In summary, a performance bond provides financial protection to project owners in case the contractor defaults on their obligations.

Bid Bond

A bid bond is a form of security provided by a contractor or bidder as part of the bidding process for a construction project or contract. It assures the project owner that the bidder is committed to the bid and has the financial capability to undertake the project if awarded. Typically obtained from a surety company or bank, the bid bond accompanies the bid submission and guarantees that the bidder will enter into a contract and provide the necessary performance bond if their bid is accepted. If the bidder fails to fulfill their obligations, the project owner can make a claim against the bid bond to recover any financial losses incurred.

Advance Payment Guarantee

An advance payment guarantee is a financial instrument provided by a bank or surety company to guarantee that a supplier or contractor will repay an advance payment made by the buyer in the event of non-performance or default. It assures the buyer that the advance payment will be refunded if the supplier or contractor fails to fulfill their contractual obligations. Typically obtained before making an advance payment, this guarantee helps mitigate the risk for the buyer and ensures the proper use of funds by the supplier or contractor. If the supplier or contractor defaults, the buyer can make a claim against the advance payment guarantee to recover the advance payment amount.

Bank Guarantee Issuance Procedure

1. In order to finalizing the draft , we need following documents/ information.

i. Filled-in Application form/ Proforma Invoice or Sales Contract
ii. Company Trade License
iii. Passport copy of the owner and shareholders
iv. Last three months bank statement
v. One-year audited financials
vi. Shareholding List

2. After acquiring all the above documents/information, we will assist the client in selection of the issuing bank/financial institution and assist in finalizing the draft for client’s review.

3. Upon receiving the draft copy of the instrument, client must thoroughly review the draft for any corrections, additions or removal of information. Should there be any amendments, we can assist in amendment of the draft accordingly to match clients’ preferences. Once the draft is approved by all the related parties, client will need to send us a copy of the draft with authorized signatory’ sign and company stamp on the draft as client’s approval along with an email confirming the same.

4. We will raise the invoice for the charges agreed and client will make the remittance against the invoice.

5.Only after we receive the payment for the raised invoice, we will assist on following with the issuing bank/financial institution consulted and provide assistance in issuing the instrument through swift/courier within 7 working days depending the issuing bank/financial institution policy.

6. Simultaneously we will assist the client in receiving the issued copy through email for reference and record keeping.


Note: The issuing charges would depend on the amount of the Bid Bond required, the type of Bid Bond, the issuing bank selected for issuance and the beneficiary bank to which it is to delivered.

Ready to get started? Complete our Bid Bond application form.

Contact with one of our finance consultants and get started today.