Guarantees and bonds

Protect yourself against supplier risk with guarantees of compensation

Guarantees (also known as bonds) see a trusted financial institution, undertake to compensate one party to an international trading contract should the other party default. Bonds or guarantees are widely used to hedge against supplier risk in many markets and industry sectors – such as performance guarantees in construction projects.
We can help arrange all the most-widely used forms of bond and guarantee, as detailed below.

The key benefits

• The reassurance to trade with partners whose performance is as yet an unknown quantity.
• Improve the probability of securing delivery of imported goods.
• Offering a bond during negotiations can help exporters secure contracts they would otherwise lose.

Features and benefits

• Earn interest on the bond principal when you are able to deposit the money required.
• Choice of all the major types of guarantee including:

Tender guarantees or bid bonds
Safeguard importers against exporters who fail to comply with expectations.
Performance guarantees
Safeguards importers with a payment of up to 10% of the contract value if the exporter fails to meet expectations – in quality or timeliness, for instance
Advance payment guarantees
Safeguard importers against exporters who require advance payment but then fail to deliver against the contract.
Retention monies guarantees
Similar to advance payment guarantees.
Warranty guarantees
Safeguards importer against financial consequences should an importer’s good fail to meet obligations under a warranty.

For further information on guarantees and bonds:

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Lloyds TSB Bank plc and Lloyds TSB Scotland plc are authorised and regulated by the Financial Services Authority and signatories to the Banking Codes.
FSA authorisation can be checked on the FSA’s Register at: www.fsa.gov.uk/register