Bank guarantee: also known as letter of guarantee, refers to the written credit guarantee certificate issued by the bank, insurance company, guarantee company or guarantor to the beneficiary at the request of the applicant, which guarantees that the guarantor will perform a certain amount of payment or economic compensation responsibility on behalf of the applicant within a certain period of time when the applicant fails to fulfill his responsibilities or obligations as agreed by both parties. Generally speaking, there are the following steps to deal with bank guarantees:

1. Apply to the bank and fill in the application form for guarantee business.

2. According to the conditions and requirements put forward by the bank, provide the following information:

(1) Copy of business license, copy of legal person code certificate, copy of tax registration certificate, and certificate of legal representative of the project party;

(two) the main contract, agreement or tender for external guarantee and related transaction background information;

(3) If the matters involved in the guarantee require the prior approval or approval of the relevant departments, the approval or approval documents of the relevant departments shall be provided;

(4) the financial statements of the project party in the last two years and the current financial statements audited by the accounting (auditing) firm;

(5) Proof documents of counter-guarantee measures;

(6) Other information required by the bank.

3. After the bank handling personnel submit the business approval (usually 3-7 working days), the bank will investigate the legality of the applicant, the authenticity of the financial situation and the authenticity of the trading background, understand the borrower's performance and solvency, and make a formal reply to the applicant.

4. After successful handling, the bank agrees to issue a letter of guarantee, and then signs a Guarantee Agreement with the applicant to stipulate the type, purpose, amount, rate, validity period, payment terms, rights and obligations of both parties, liability for breach of contract and other matters that both parties think need to be agreed; For those who need to provide counter-guarantee, they should also go through counter-guarantee procedures as required by the bank.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.