Accepted Loan Security
1. We Accept Bank Guarantee for Loan Security:
WHAT IS A BANK GUARANTEE?
Bank guarantees are exactly what their name insinuates. They are a guarantee from a bank that a debt will be paid within a specific time given by the lender. The financial institution declares that if the Borrower /buyer fails to pay their part in a transaction, they will pay the debt for them. They do not do this for free, however. There are generally strict credit checks and of course, collateral comes into play. No bank wants to guarantee a debt it will likely have to pay. Most often the collateral takes the form of liquid assets such as cash, stocks, and CDs held at the bank, as many banks will only offer guarantees to account holders. It is important to note that these assets do not become the property of the bank. The owner of the guarantee retains ownership of the collateral unless the debt is not paid.
The bank may place a “hold” on the assets, however, so that they cannot be used while the guarantee is outstanding. A bank guarantee can be a priceless tool when it comes to completing large or overseas business transactions. It can allow for growth and promote trade in ways that could not happen otherwise. A bank guarantee is essentially freedom. It is freedom to proceed with transactions that may not be fully financed by cash on hand but that need to happen quickly in the best interest of the company. It reduces risk on each side, freeing both buyer and seller to proceed with confidence. While there are other forms of financing available, sellers often view bank guarantees more favorably than others for the simple fact that they give the impression of being more reliable. The fact that they are issued by a bank and that the bank itself is the one that will pay if the buyer cannot lend greatly to this.
WHEN ARE BANK GUARANTEES MOST USEFUL
While they can be used in all kinds of transactions, bank guarantees are especially useful in international trade transactions between a buyer and a seller that do not have an established business relationship with each other. They are designed to reduce risk if the deal does not go as planned. This is different from other types of guarantees that ensure the transaction does go as planned. Rather than guaranteeing the means for payment is there, a bank guarantee ensures that if the means for payment is not there for some reason, a set amount will be paid by the bank.
DO YOU NEED A BANK GUARANTEE?
How do you know? The key is to consider whether or not you are holding back from initiating profitable transactions and growth for fear of not being able to meet obligations. While not initiating transactions you know you cannot complete is wise, financing a profitable opportunity with a bank guarantee when it is more likely that not that you will be able to complete the deal on your own is also wise. A bank guarantee can give the borrower /buyer as well as the lender/seller protection. The borrower/buyer can proceed with a profitable deal and know that if the worst does happen if the bottom does fall out, the obligation will still be met. We are here to help you with this decision making process.
2. Credit Wrap and Loan Surety Bond:
An insurance wrap is a type of insurance against an asset or multiple assets “wrapped” all into one. It is a policy that is used for businesses, commodities, and other business proposals such as real estate, precious gems, lesser in-ground assets.If you have a 100 million dollar asset, such as diamonds, and you have a business, you can “wrap” the asset and entity together for protection in future based protection based on a deter lesser value of the combined asset and/or entity. Insurance wraps are not complicated. The complicated part is getting an insurance company to do it for you. It is paramount for the insurance company to know what they are going insure for millions of dollars.
The Credit Wrap is an accepted Loan Security by our Company because it stand the responsibility for both the Borrower and the lender to comply with their fulfillment of Debt Obligations against an Insurance Credit Wrap Issued by a Good Company .
Credit Wrap-Around Loan’ A loan that is most commonly used with property with an outstanding loan.The borrower periodic loan payments are sufficient to repay the existing loan as well as the lender loan to the borrower. When the loan involves mortgage loans, it is also referred to as a wrap-around mortgage