Bank guarantee

Trade finance.

A guarantee issued by a bank, in support of a commercial transaction.

The guarantee is a secondary obligation of the bank, called upon only in the event of the failure of a party to the commercial transaction.

Contrasted with a letter of credit, which is a primary obligation of the bank.

See also

• Facility
• Guarantee
• Guarantee line
• Guarantor
• Letter of credit
• Sustainability linked loan
• Trade finance