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Bank guarantees create trust and hedge many risks reliably
When issuing a bank guarantee, a monetary institution irrevocably undertakes to pay a certain sum of money to a third person, called the beneficiary. This payment obligation arises as soon as the party ordering the guarantee fails to meet an obligation agreed in a contract. The bank offering the bank guarantee undertakes to make a payment to the beneficiary if the terms and conditions of the guarantee are fulfilled.
A bank guarantee can be used to hedge a wide variety of risks. İŞBANK offers the following types of guarantees:
- Bid bonds
- Advance payment bonds
- Performance bonds
Bid bonds
A bid bond covers the claims of a bidder in the event of earlier than expected disbursement or changes in the bidding process. If the buyer has accepted the bid and the bidder is not in a position to sign the corresponding agreement, İŞBANK’s bid bond guarantees payment of a previously agreed portion of the bid price.
Advance payment bonds
An advance payment bond by İŞBANK secures repayment for the buyer of an advance payment already paid to the seller if the seller fails to perform the agreed contract.
Performance bonds
Performance bonds secure a buyer's claims in respect of a seller in the event that the seller does not perform the contractual obligations.