Guarantees
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Guarantees are commonly used in international trade transactions
The Guarantee is normally used in order to secure the fulfilment of contractual obligations such as e.g. repayment of an advance payment if no delivery is made or compensation in case of non-delivery or defect delivery. When you and the supplier have agreed on the contract terms, you also need to define which of the terms that are to be secured by a Guarantee.
If some of your obligations are to be secured, you apply for a Guarantee at Nordea who then issue's* the Guarantee in favour of the supplier. Should some of the supplier's obligations need to be secured, the supplier will request his bank to issue a Guarantee in your favour.
Your benefits with Guarantees
- you avoid or secure advance payment
- you can obtain a supplier's credit
- you secure compensation for non fulfilment of important obligations.
*) issuance means that Nordea guarantees the payment to the supplier and consequently the issuance requires the credit approval of Nordea.
