Contract Guarantees
Contract Guarantees confirm your company's ability to perform the contract without the need to submit costly securities otherwise required by your business partner.
Contract Guarantees are widely used as a collateral securing a proper performance of a contract. A buyer ordering goods or services may require a specific financial guarantee in case the contract is breached, performance deadlines not being met, or the quality of the goods and services being provided is not satisfactory.
Providing a buyer with a financial collateral for performance of a contract may be difficult for your company. The working capital which could be used to grow the company’s business and finance other contracts is blocked. Contract Guarantees are a solution to this problem. A guarantee is a written commitment of the insurer to pay a certain amount to the beneficiary of the guarantee (the buyer) in the event of the contractor failing to meet its duties and obligations towards the beneficiary of the guarantee.
Who is eligible
Companies joining a tender or applying for a contract in Poland or abroad. We provide Contract Guarantees to small, medium and large enterprises operating in various industries - including pharmaceutical, companies, construction companies, or shipyards.
Protect yourself in the event of non-payment by your customers.
- Grow your business without worrying about getting paid.
- Export safely even to the most remote markets across the world.
Benefits
- Improved liquidity - you can compete in many tenders at the same time and grow your business.
- Greater credibility with business partners.
- Contrary to bank guarantees, guarantees issued by KUKE do not encumber your credit line with the bank.
- Easier acquisition of export contracts – KUKE’s guarantees are a commonly accepted form of security by foreign buyers.
- Guarantees are issued quickly thanks to a general agreement concluded between KUKE and your company.
Securing every phase of the contract
The entire process of the contract can be effectively covered by a guarantee, giving the buyer a certainty that the guarantee will be disbursed should the contractor fail to complete the works in compliance with the contract. Also, guarantees confirm a positive assessment of the company’s financial standing by an independent financial institution, thus increasing the entrepreneur’s business credibility.
Types of Contract Guarantees
Bid/Tender Guarantee
The guarantee allows an entrepreneur to participate in a number of tenders without the necessity to deploy his own funds. Bid guarantee replaces a cash tender deposit, which must be provided when entering a tender proceeding. By issuing the guarantee to the beneficiary, KUKE takes on the obligation to pay the amount indicated in the guarantee, in the event that the entrepreneur that has won the tender refuses to sign the contract under terms proposed, or otherwise violates obligations connected with participating in the tender.
Performance Guarantee
The guarantee is issued at a request of the entrepreneur who has won a tender, secured with KUKE’s guarantee, and is now obligated to present a collateral for a proper performance of the contract. The guarantee obligates KUKE to pay the beneficiary the amount specified in the guarantee if the entrepreneur fails to carry out the terms of the contract.
Advance Payment Guarantee
The guarantee is issued at a request of the entrepreneur who, in accordance with a contract concluded with the beneficiary, has received an advance payment towards its performance. Advance payment guarantee obligates KUKE to pay the beneficiary the amount specified in the guarantee, in the event of the entrepreneur failing to perform the contract and not returning the advance payment within the stipulated time limit.
Warranty Guarantee
The guarantee is issued at a request of the entrepreneur and obligates KUKE to pay the beneficiary the amount specified in the guarantee in the event that the entrepreneur fails to perform the warranty obligations specified in the contract, or performs them improperly.
Counter Guarantees for banks
We share the risk with the bank issuing a guarantee, typically a contract guarantee. KUKE’s Counter Guarantee covers the recourse risk on the exporter if the beneficiary of a contract guarantee makes a request for payment under that guarantee. A Counter Guarantee may apply to a single contract, or to an entire guarantee line provided to the exporter by the bank. Find out more