About Bank Guarantee
A layman might not understand this term, as it’s something related to the people who are in business and they don’t use it often. For a layman, the bank has few things, like a deposit in a savings account, take the earnings, deposit in FD, or take loans and fulfill back. But, banking processes are beyond all these, if you happen to be in business you will understand. Well, knowledge is always wealth, so if you learn today might be it can be of help when you intend to start a business.
Businessmen have a lot of dealings with the bank, that they are most familiar with the process in the bank. Well, not all until you know about Bank Guarantee! As the name suggests, it’s the guarantee given by the bank. What more?
We look forward to banks in business mainly to get loans for our business apart from holding accounts for transactions. Loans are mainly to help us keep the business running, to reinvest in capital funds. Apart from loans how can you arrange for capital funds?
By taking a loan from friends and family people, but this has its own set of consequences. The next is to rely on savings or any emergency cash savings. So, have you done it? if not, then you really need to think about it. investing in many instruments have their own return policies, you can invest in crypto, for now, that will give you great returns. The platform has robotically automated pilots that will help you in trading, with full confidence and earn returns. Among the platforms, Qprofit is the best, legal and genuine.
Read here, to understand what is bank guarantee and how it affects your business:
A bank guarantee is a promise that a bank or any financial institution gives to the client of the borrower, that under any circumstances if the borrower defaults and has any issues, the bank is liable to pay the money that it guarantees.
Let’s consider the example of a construction company. Construction company called ‘ABC’ has a project from DC company and the cost is 1Crore. The DC company can give 20% of the money as advance to the ABC for working purpose. In this scenario, the ABC company should give a bank guarantee for the amount.
This money transaction can never be given by anyone else, apart from a registered financial institution. So, here the company ABC gets a loan free capital with this bank guarantee.