Requirements for Companies Applying for Bank Guarantees

There are many requirements for company’s applying for Bank Guarantees. These requirements are dealt with by what is known as Due Diligence. The company requiring the Bank Guarantee will be requested to fill out an exhaustive questionnaire. These questionnaires are usually known as KYC, Know Your Client. Other definitions are CIP, Customer Information Profile or CIS. Customer Information Sheet. 

Due Diligence 

Due diligence is usually carried out by a lending institution or the provider of a Bank Guarantee. The Bank Guarantee process can sometimes be long and arduous. This can be especially so if the beneficiary is looking for a line of credit. We will go into the actual requirements below. So if you are interested in applying for a Bank Guarantee, get ready to fill out some paperwork. 

Due Diligence Requirements 

All requirements are of equal importance. If you fail one then you will not be approved for a Bank Guarantee. 

Trading History – As the names suggest this will show what the company is trading and how long they have been trading. Usually, a five-year trading history is required. If you are a new company it may be difficult to obtain a Bank Guarantee. However other successful diligence will help your cause. 

Trading History Financials – This will show whether your company has been successful. Profit and loss accounts, turnover and asset and liability statements will determine whether your company is soundly run. A company on a proper financial footing is a shoe-in for a Bank Guarantee. 

Personnel Details – This section deals with the directors of the company, shareholders and beneficial owners. Copies of passports are required along with proof of address. This will help ascertain if there are any outstanding warrants or bankruptcy orders. Past bankruptcies and warrants will also show up as well. 

It is also important to ascertain if there are any beneficial owners hiding behind directors or shareholders. Then checks can be made on them as well. It is very important to find out the true owners of the company. 

Business Plans – A business plan must be sound make sense and have a strong exit strategy. If the company is borrowing against a Demand Bank Guarantee they must be able to repay the loan. The exit strategy will show how this can be accomplished. 

Successful Applications 

If companies pass the due diligence process, they can expect to be granted a Bank Guarantee. In this day and age of stringent checks it is imperative that all applications are sound and above board. Whatever you do not lie about anything. You will be found out. It is better to be honest. Honesty always pays dividends. 

For companies interested in an in-depth view on how to apply for a Bank Guarantee. There is a company in Geneva who are market leaders in supplying Bank Guarantees. Please visit IntaCapital Swiss to find out more.