Guarantees and Standby Letters of Credit
Traditional trade solutions (instruments) in the form of Guarantees and Standby Letters of Credit can help you meet your business objectives and enable both parties to trade with increased security and reduced risk.
Disclaimer
Note that some of the products may not be available in Israel, for further information regarding the products please contact your Relationship Manager.
Risk management and working capital solutions
Guarantees and Standby Letters of Credit are standalone, independent undertakings given by the ‘Issuing Bank’ to the ‘Beneficiary’ for an agreed sum payable on receipt of a demand in writing. Overall, the instruments provide the beneficiary with the assurance that they will obtain the intended service or outcome by the ‘Applicant’ or be compensated by the Issuing Bank. In some countries, the local market practice is to issue or receive Standby Letters of Credit rather than Guarantees.
These are ideal for businesses seeking to expand into new markets, manage international and domestic project risks, optimise their working capital, or require payment assurances without the need to make upfront payments or provide cash deposits to those individuals (as even cash collateral to secure can be held by the Bank on your behalf).
Overview
- Comprehensive assurance: Guarantees and Standby Letters of Credit provide independent payment assurances, ensuring Beneficiaries receive compensation for non-performance or non-delivery.
- Optimised working capital: These instruments allow businesses to manage their cash flow effectively by reducing the need for upfront payments or cash deposits.
- Tailored solutions: With negotiable wording, HSBC Innovation Banking offers flexible guarantees and letters of credit that can be customised to meet specific business needs in both domestic and international markets.
- Global network: HSBC Innovation Banking is backed by a global network of group offices and correspondent banks, enabling us to meet specific guarantee requirements, whether domestic or international.