Domestic bank guarantee
In a domestic bank guarantee the beneficiary is domiciled in Finland. A bank guarantee serves as safe collateral and is part of your company's risk management.
- A bank guarantee is an undertaking issued by the bank on behalf of your company in favour of your contracting party. A guarantee granted by the bank to your company can also be considered an indication that the bank trusts your company's ability to fulfil its contractual obligations for which the bank guarantee has been issued as collateral.
- Offer your contracting party a bank guarantee issued by Nordea to secure the fulfilment of your company's contractual obligations. This way your contracting party knows that you are a reliable cooperation partner.
- Your company can also request a bank guarantee from the other contracting party so that you can be sure that your partner will be able to act as provided by the agreement. A guarantee issued by the bank provides security to your company and helps to manage risks especially when the contracting party is not well known.
- A bank guarantee serves as safe and reliable collateral for both contracting parties. With the bank serving as the guarantor, you can be sure that the interests of both your company and your contracting party will be treated equally. A bank guarantee is safe and easily managed as collateral.
Different guarantee types
- A domestic bank guarantee is almost always as for one's own debt, which means that the receivable can be claimed from the guarantor as soon as it has matured without first trying to claim the amount from the debtor.
- On-demand undertakings (= payable on demand), which are common in international trade, are rare in domestic trade. The issuer of such an undertaking must pay the principal debt to the creditor on first demand in accordance with the terms and conditions of the guarantee without investigating whether the creditor has the right to payment on the basis of the principal agreement concluded between the creditor and the debtor. On-demand undertakings are not guarantees and the Act on Guaranties and Third-Party Pledges (1999/361) is not applied to them.
For what purpose?
Bank guarantees can be used as collateral in several situations. They can be used in connection with different deliveries and construction contracts as well as collateral for the purchase price or for almost any other payment obligation. Bank guarantees can also be used to fulfil the collateral obligations provided by different official regulations or legislation.
You can check our currently valid prices concerning the bank guarantee and the bank guarantee limit from our tariff which is available for viewing at all Nordea branches.
How to apply for a bank guarantee?
- Obtaining a bank guarantee almost always requires a written principal contract between your company and the other contracting party.
- A bank guarantee can also be issued on the basis of an official regulation or an obligation to give collateral required by legislation.
- The maximum amount of a bank guarantee must always be restricted and bank guarantees are as a rule always issued with a fixed term.
- Click the 'Forms' link on this page to access the bank guarantee application form. You can fill it in there and print it out. By signing the bank guarantee application your company undertakes to comply with the bank guarantee's general terms and conditions; among other things to compensate the bank with all the bank has paid as the guarantor, to pay interest on the amount paid and to pay the guarantee commission and other charges related to the bank guarantee.
- The issuance of a bank guarantee requires a credit decision at a Nordea branch.
Advice on bank guarantees
If your company needs bank guarantees regularly, the bank can grant you a bank guarantee limit.
You can send your bank guarantee applications to us via Netbank. You can also browse your existing guarantees there.