Payment guarantees mitigate credit or country risk when selling on an open account basis. They are often used to cover the non-payment of debts arising under a transaction or over a period of time.
Payment guarantees mitigate credit or country risk when selling on an open account basis. They are often used to cover the non-payment of debts arising under a transaction or over a period of time.
Payment guarantees provide financial security to the beneficiary should the applicant fail to make payment for the goods or services supplied. Such guarantees generally run up to the final scheduled date of payment, plus a grace period to allow the beneficiary to make demand in the event of non-payment.
For certain buyer credit risks, Ekspo Faktoring A.S. can provide payment guarantee services. These are generally well suited to large spot deals or annual contracts without L/C. We will negotiate the details of the guarantee – what kind of risks are to be hedged, the definition of country risks etc – with our client and those details will be included in the documentation. The guarantee fee will vary depending on importer, documentation etc.