Bank guarantee

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A bank guarantee is a kind of guarantee from a lending organization. The bank guarantee signifies that the lending institution ensures that the liabilities of a debtor are going to be met. In other words, if the debtor fails to perform the obligation, the bank will cover it. A bank guarantee allows the customer, or debtor, to acquire goods, purchase equipment or draw down a loan.[1] A bank guarantee is a promise from a bank or other lending institution that if a particular borrower defaults, the bank will cover the loss. A bank guarantee is similar to, but not the same as a letter of credit.[2]

## References

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1. ^ What Is a Bank Guarantee? investopedia.com
2. ^ Bank Guarantee investinganswers.com