Bank guarantee

About the product

What is a bank guarantee?

A bank guarantee is an independent commitment of the bank to pay to the guarantee beneficiary (eligible entity) the amount indicated in the guarantee (guarantee amount) if the guarantee issuer, upon whose instructions the guarantee was issued, failed to meet its obligation.

Payment to the guarantee beneficiary is made directly by the guarantor bank or via another bank, after the beneficiary has met specific payment conditions, which may be ascertained with defined documents in the guarantee agreement, such as, for instance, invoices or consignments.

It is an effective instrument increasing transaction security and mitigating the risk of counterparty default. When the guarantee comes into force, it becomes a binding instrument irrespective of the validity of the main legal relationship (e.g. trade contract) between the principal and the beneficiary.

Find out how a guarantee works!

 

Is bank guarantee perfect for your business?

If you are in trading or service business, operating in Poland and abroad, often establish new trade contacts and want to improve your credibility towards counterparties, then a bank guarantee is just the solution for you. The guarantee will be an essential instrument to support your business - issuing a guarantee, you will increase the credibility of your company. Being a beneficiary of a guarantee, you will minimise the risk of counterparty default.

What guarantees does the Bank offer?

We offer a full range of guarantee products, among them especially the following types of guarantees:

  • Excise guarantee - submitted as excise security to guarantee payment of one or more tax liabilities and fuel surcharges; it may replace a cash deposit or surety.
  • Customs guarantee - secures the payment of customs duties, taxes or other payments to the Customs Office; it may replace a cash deposit or surety.
  • Performance guarantee - secures the performance of an agreement, claims under a technical guarantee and warranty, payment of contractual penalties in the case of default by the principal against contractual obligations; it may replace a guarantee deposit.
  • Lottery guarantee - ensures the payment or surrender of prizes in a lottery/promotion action/game organised by the principal.
  • Tender guarantee - replaces a bid bond guarantee and is payable when the Bank's customers, after winning the tender, fails to sign the contract or defaults against other obligations, e.g. connected with the deadline for the performance of a specific job.
  • Guarantee of punctual loan/credit payment - secures a full repayment of credit or loan.
  • Punctual payment guarantee - is an obligation of the Bank to pay the amount should the principal fail to pay for the goods purchased or services performed in keeping with the trade agreement signed.
  • Rent payment guarantee - secures a payment of rent.
  • Lease payments guarantee - secures a payment of part or all of lease instalments in the case of lessee default.
  • Advance return guarantee - secures a return by the principal of an advance (advances) received earlier from the beneficiary should the principal default against the agreement under which the advance was paid and refused to return the advance.

Guarantees may be granted individually to secure one specific transaction or in the form of a line, within a specified limit.

The line for guarantees means one credit decision, one agreement, one collateral for several products. The line is renewable and is granted in PLN for a period of up to 12 months. It enables efficient securing and financing of your liabilities (current and future), improvement of your company's liquidity and credibility as well as cutting the time from your guarantee order to its issuance by the Bank.

All guarantees may be issued on Customer's request in Polish, English or German.

Upon your instructions, Bank Millennium S.A. may also issue a guarantee promise, which constitutes a commitment of the Bank to grant a guarantee after you have met the conditions agreed with the Bank.

Benefits

What are your benefits as a beneficiary of the guarantee?

  • increase security of trade transaction with your counterparty,
  • limit the risk of counterparty's default against contractual terms and conditions,
  • efficiently collect your receivables with the use of the guarantee,
  • quickly receive payment of the claimed amount regardless of the counterparty's financial situation, also without delay, which is usually involved with court proceedings,
  • the Bank will take the counterparty risk from you.

What are your benefits as a principal of the guarantee?

  • strengthen the credibility of your business as seen by the counterparty thanks to the renown of Bank Millennium SA as the guaranteeing bank,
  • ensure further effective cooperation with your counterparty as you will not have to commit your own money to secure the transaction,
  • maintain financial liquidity,
  • we will agree with you the amount of the guarantee depending on the terms and conditions of your contract with the guarantee beneficiary,
  • get professional assistance and advice from your Biznes Advisor when submitting documents and assessing the agreement, which will underlie the guarantee and also when verifying an potential claims under the guarantee.

How to use?

How to get a bank guarantee?

Contact your Credit Advisor who will provide you with detailed information about the offer and documents required by the Bank to check your creditworthiness. He will also help you prepare the instructions to issue the guarantee. We will assess your creditworthiness free of charge.

To calculate the amount of collateral of a guarantee, we shall require the following documents from you:

  • founding documents that indicate the legal status of the company,
  • documents indicating the authorities empowered to make statements regarding property rights and financial obligations,
  • confirmation of the business' REGON statistical number,
  • confirmation of the NIP number (Taxpayer Identification Number),
  • financial documents of the company.

We may also ask for other documents.

After having checked your credit capacity, the Advisor will contact you and present your personalised offer. Just sign a Guarantee Agreement and have the Bank Millennium SA assume the risk of default against the trade contract to secure the transaction.

For detailed information about the offer, call TeleMillennium 801 31 31 31 or +48 22 598 41 61 (for foreign or mobile callers).