There are moments in life when, to get something, like a house, a car, or something of great value, the purchase requires a guarantee that guarantees the seller that, whatever happens, he will charge the price of the good. that it puts up for sale. And for that, a guarantee is requested. This can be personal, or a bank guarantee.
As its name suggests, a bank guarantee is one where the entity that guarantees the payment (if the person who must pay does not) is the bank. But, do you want to know more about this figure? So here we explain what a bank guarantee is, its requirements, how to request it and the types of guarantees that exist.
What is a bank guarantee
We can define a bank guarantee as a procedure that is carried out with the bank where a guarantee is offered, in this case given by the bank, which will respond in case the guaranteed (i.e. the client) does not enforce an obligation towards a third party. In other words, the bank vouches for us by ensuring that, even if that third person does not collect from us, they will still have their "money" from the bank.
Of course, a guarantee is a risk, whether for a bank, a company or an individual. Many associate it with a loan, although it is known that they are not two similar terms (especially since the guarantee does not imply an immediate financial outlay, but will only be effective if the person does not take over the obligation that he owes).
To make it easier for you to understand, we give you an example. Imagine that you want to buy a house but you don't have enough money to do it. You have the option of requesting a loan from the bank, but also that the bank itself guarantees you. If you choose this second option, the bank becomes your endorsement (bank guarantee) to guarantee the owner of that house that, if for some reason you cannot pay, the bank will take care of that payment.
Now this is not done "altruistically." In most cases there is a contract involved with a high percentage rate, which is what acts as a payment support.
What is needed to have a bank guarantee
As we have said before, a bank guarantee supposes that a bank assumes a risk since it becomes a guarantor in case you do not comply with the obligation, mainly, of a payment. Therefore, although banking entities are predisposed to grant this type of guarantees, because for them they are very beneficial, they need meet a series of requirements for them to accept.
To do this, the first thing you should do is formalize the bank guarantee before a notary. What you have to do? A bank guarantee coverage policy, or a coverage policy for bank guarantees limit (when there are several).
In reality it is a contract with your bank in which he agrees to guarantee you and serve as a guarantee for a third party in the event of a breach on your part. But it doesn't just stop there. Also that document will regulate the relationships you have with the payment, the commissions that they ask you for being a bank guarantee, the interests and the expenses.
At the same time, a bank guarantee must take into account 3 information: the amount for which it guarantees, the duration of that guarantee, and the conditions that are charged in the event that there is a non-payment by the person obliged to pay.
Types of bank guarantees
Within the types of bank guarantees, you can find two types that are the most frequent. These are:
Financial bank guarantee
Refers to an endorsement that has as a goal the payment of a certain amount by the bank. Of course, this will not take effect until the person fails on their own in the payment. Meanwhile, the bank does not have to pay anything.
Technical bank guarantee
This type of endorsement refers to situations in which, when there is a breach of a non-payment obligation, the bank takes care of it.
To make it easier for you to understand, we talk about situations, for example, before a public body, an administration or even a third person. For example, it may be due to participation in a tender, a tender, execution of works, machinery, administrative resources, etc.
How to request an endorsement
Once you decide that the only way to find a guarantee is through a bank guarantee (because you do not want / can use a personal guarantee), the next step you should do is go to your bank to find out about this type of service.
The bank's decision will not be immediate, that is, first they will request all kinds of documents to study the case, evaluate the risk and see the benefits they can obtain if they become your guarantors. Without that information, they will not even pay attention to your case, so it is important that you bring everything to save time; including, if possible, a work life report, loans if you have them, material goods, etc.
After a time (which can be from a few days to a few weeks or even months), the bank can accept to be the bank guarantee. But at the same time it will impose its conditions. As a general rule, these are usually a deposit of between 3 and 6 months of what you have to pay to that other person in an account that cannot be touched until the endorsement ends, as well as the commissions or interest that we will have for requesting that the bank guarantees.
If you accept, a contract must be signed where all of the above is collected. And ready. You already have a bank guarantee.
Difference between guarantor and guarantor
Before concluding, we want to point out two concepts that, at the moment, you may think are the same, when in reality they are not. We are talking about the guarantor (or guarantor) and the guarantor. They both try to "give money", but they are very different from each other.
To begin with, a guarantor is a person who is liable for another in case that other person does not comply with the payment. The guarantee does the same, that is, it guarantees payment in the event that the obligated person does not comply with it.
Now, the guarantee itself is obliged to make that payment in the event of default by the person who must do so, while the guarantor does not have to take charge of the payment until the main debtor is sued before.
On the other hand, although the two terms may seem similar, the truth is that they both act in different "leagues". A guarantor is a mercantile term while a surety is civil.