Advance payment guarantees

  • Security to beneficiary for an advance payment made to supplier
  • Improve buyer and seller relationships when carrying out large export deals
  • Years-long experience
  • Largest client base
  • Wide range of quality bank guarantees
  • Professional client relations

Product description

Advance payment guarantee (guarantee for advance repayment) is a bank guarantee by which a guarantor (i.e. CKB) undertakes to pay to the guarantee beneficiary (buyer) a certain amount of money (advance payment made), if the guarantee principal (seller) fails to meet contractual obligations.

Advance payment guarantee is generally used in connection to large export/import deals, where suppliers of equipment or other goods require buyers to pay a certain amount as advance payment. Considering the fact that, in general, there is a misbalance between the advance payment and the amount that is to be paid for the goods purchased, a buyer secures itself by this guarantee in terms of establishing the disrupted balance between the amount paid and still to become due. Also, in case the seller fails to deliver the goods for which the advance payment was made, this guarantee is the security for the buyer to recover the payment made.

The product is intended for all legal entities and primarily those participating in large export/import deals.

Product price

For this guarantee, the Bank will charge its clients a minimum fee for issuing a guarantee in the amount of EUR 50, or 2,00% - 3,00% annually of the approved guarantee amount.

In special cases, the Bank management may apply a negotiated fee for issuing a guarantee.

Required documentation

To apply for this guarantee, the client has to submit the following documentation:

  1. application for obtaining an advance payment guarantee in the typed form, with all important company data
  2. contractbetween the applicant and third party in which the Bank guarantee is required

In addition to the aforesaid, the required documentation, regardless of the type of guarantee asked by the client, includes:

  1. copy of registration certificate
  2. copy of certificate on company classification according to its business activity
  3. copy of signature specimen card
  4. copy of OP application form (certified signatures of persons authorized to represent the company)
  5. set of forms for annual financial statements (Balance Sheet, Profit and Loss Statement, Cash Flow Statement, Statement on Changes in Equity, Balance Sheet ancillary form, Profit and Loss Statement ancillary form, Tax Return on Profit Tax, Calculation of Depreciation for tax purposes) for the last 3 years, certified by the Commercial Court
  6. trail balance for the last 3 years, financial statement on operations (Balance Sheet and Profit and Loss Statement) for the current year overview
  7. trial balance for the period of the current year

How to apply for a guarantee?

The company should submit the application supported by required documentation to the Bank. The application for obtaining the guarantee must be certified by corporate seal and authorized signature.

The application must include the data that will facilitate evaluation of the overall activity and the economic and financial analysis. On the basis of the submitted documentation and performed analysis, the Credit Committee will decide on the application and, if approved, contract will be signed with the client.