About the product

Bank guarantee is a form of security, in which the Bank acts upon your order, assuming an obligation to your counterparty (beneficiary of the guarantee) to pay a specific amount when your company defaults on its obligations. The guarantee stipulates the type and scope of the obligation and the terms and conditions that have to be fulfilled for the drawing on the guarantee. The product is also available within the line for bank guarantees and multi-product line.

This service is available online at the Trade finance module in the Millenet internet banking system.

Benefits for your company:

  • You may negotiate better conditions for your trade agreement (for instance, deferred payment term, discount).
  • You avoid commitment of your funds if the guarantee is an alternative form of collateral acceptable by the beneficiary (for instance, bid bond guarantee instead of bid security).

Benefits for the beneficiary:

  • He may use effective instrument for enforcement of receivables without additional costs and delay.
  • Secures himself against the risk of:
    • Customer's insolvency or against refusal to pay,
    •  Customer's resignation from transaction and refusal to accept goods.
  • He is sure to receive payment or recompense if the Customer defaults on the agreement.
  • It is easier for the beneficiary to sell a receivable secured with guarantee.

Scheme

schema

Channels of access to product information

Internet

Wherever you are, with internet access, you can check account balances and history on a 7/24 basis, also viewing information concerning other products i.e.: cards, loans, guarantees and letters of credit, standing orders or term deposits.

Corporate Branch

Get detailed information about Bank Millennium products by contacting Advisors in the Corporate Banking network.

Contact with Advisor

By phone

Our Consultants will provide you with detailed information and will carry out your instructions. 

801 31 31 31
line available for fixed-line and mobile calls

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Questions and answers

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  • 1. What are bank guarantees used for?

    Guarantees are utilised for various purposes:
    • guarantee required by law (for instance, excise tax, customs, lottery guarantee),
    • guarantee required by counterparty – buyer (for instance, performance guarantee, bid bond guarantee, retention guarantee, advance payment guarantee),
    • guarantee required by counterparty – seller (for instance, payment guarantee).

  • 2. What types of guarantee are issued by the Bank?

    • payment guarantee – the Bank's obligation to make payment for the delivered goods, services or lease in case your company defaults on its payment obligations,
    • guarantee for payment of rent – the Bank's obligation to pay for the rent and/or administration fees in case your company defaults on its obligations under the rent agreement,
    • advance payment guarantee – the Bank's obligation to pay equivalent of the prepayment/advance paid in favour of your company, if for the fault attributable to your company there have been some circumstances that entitle the beneficiary to demand its return (for instance, the goods have not been delivered or services have not been provided),
    • excise tax guarantee (as excise security to cover one or many tax obligations) – the Bank's obligation to pay the amounts under the tax obligations of your company referred to in the excise tax Act, in favour of the customs office (beneficiary of the guarantee),
    • customs guarantee – security for payment of customs debt, taxes and other fees your company is obliged to pay in favour of customs office. It may substitute a cash deposit or surety,
    • performance guarantee (for a contract) – the Bank's obligation to pay in favour of the beneficiary if the contract has not been duly performed or has not been performed at all. It is a form of securing delivery of goods or services of a specific quality within the contractual deadline or execution of a specific investment project,
    • bid bond guarantee – placed as collateral for payment of security deposit (bid security) by a bidder in a tender. It means the Bank's obligation to pay in favour of the organiser of the tender the amount of bid security if your company defaults on the obligations defined in the conditions of the tender (for instance, it does not sign agreement in the period of bid validity),
    • guarantee for credit/loan repayment – the Bank's obligation to pay the due and payable part or all the credit/loan in favour of the beneficiary (bank or company that grants a credit/loan) if your company defaults on payment,
    • guarantee of payment of leasing instalments – the Bank's obligation to pay the due and payable part or all the lease payments if your company defaults on payments.

  • 3. In what currencies may guarantee be processed?

    The basic currencies are PLN, EUR, USD, but – should the need arise – the transaction may be also performed in other currencies.

  • 4. Can the bank issue a guarantee in accordance with a template enclosed by company, different than that applied by the bank?

    Yet, it can. In order to issue a guarantee in accordance with the Customer's template (for instance, the template agreed on with the counterparty) the Bank has to assess its text. The text of the guarantee can be negotiated with the Bank thanks to a unique-on-the-market solution from the Trade finance module in the Millenet internet banking system. The process is fast and effective.

     

  • 5. Can a guarantee be issued for the obligations of another entity than the entity placing order?

    Yes, it can. The Bank may issue guarantee for another entity than that placing the order. The company that is the Bank's Customer should only fill out an order, stating (in the field "Counterparty") the linked company as the entity for which the Bank is to issue a guarantee.

     

  • 6. Can a guarantee be issued for obligations of a consortium?

    Yes, it can. Then the guarantee is issued upon the request of the Bank's Customer, but for the obligations of the entire consortium. In such a case, the provision stipulating that the guarantee is issued for the consortium's obligations and the participants  of the consortium must be included both in the content of the order and credit decision.

     

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