Bonds and Guarantees
Use Guarantees (also known as Bonds) to give new buyers confidence in your ability to make payment or perform under a contract.
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Tender Guarantee (Bid Bond)
Compensates the buyer/beneficiary if tender is withdrawn or the supplier declines to sign contract. The typical value of the Guarantee against the overall contract value is 2-5%.
Advance Payment Guarantee
Provides comfort to the buyer/beneficiary of repayment of advances if the supplier fails to perform in line with the agreed contract. Typically 10-40% of contract value.
Standby Letters of Credit
Effectively performs the same function as Guarantees – normally a ‘back-up’ Guarantee of payment if buyer doesn’t pay for goods.
HMRC Guarantees
Can defer payment of customs and excise duties.
Performance Guarantee
A Guarantee against failure to perform an agreed contract. Typically 10-20% of contract value.
Retention Guarantee
Where it has been agreed that the buyer/beneficiary retains a portion of the payment for a certain period, the exporter will request its bank to issue a retention bond in favour of the buyer as security. This type of Guarantee protects the buyer from non-fulfilment of the contract terms. Typically 5-10% of contract value.
Warranty Bonds
Provide security to the buyer/beneficiary that the goods or services supplied will perform as per the contract under the specified warranty terms. If they do not, the Guarantee can be called on by the beneficiary.
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Why choose Lloyds Bank?
Important Legal Information
Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service.
The products and services outlined on this site may be offered by legal entities from across Lloyds Banking Group, including Lloyds Bank plc and Lloyds Bank Corporate Markets plc. Lloyds Bank plc and Lloyds Bank Corporate Markets plc are separate legal entities within the Lloyds Banking Group.
Lloyds Bank is a trading name of Lloyds Bank plc, Bank of Scotland plc and Lloyds Bank Corporate Markets plc. Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no.2065. Bank of Scotland plc. Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. SC327000. Lloyds Bank Corporate Markets plc. Registered office 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 10399850. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278, 169628 and 763256 respectively.
We adhere to The Standards of Lending Practice which are monitored and enforced by the LSB: www.lendingstandardsboard.org.uk.
Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all business customers will be covered.