Bonds, Guarantees and Indemnities
Business would be easy if all deals went smoothly without the need for financial guarantees and contingencies. Cash is sometimes needed to be deposited as security for an eventuality or as backup for lack of performance under a contract but there is an alternative. Providing a guarantee or an indemnity a guarantee can provide your trading partner with reassurance that your contractual obligations will be met. It can also be issued for a defined sum of money payable against a simple demand or on demand accompanied by supporting documentation. Guarantees can also be a helpful process for both an importer and exporter. If you're buying you get a bank backed security that can be claimed upon, if you're selling you can give the comfort needed to satisfy the buyer that you will fulfill your contract.