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Standby Letters of Credit and Guarantees

Do You...

  • Do business domestically or internationally with government or other entities?
  • Enter into contracts/agreements which require you to provide cash, collateral or other security to another party?
  • Require a bid guarantee* or a performance guarantee** to support your business transactions?
    ...then consider CIBC Trade Finance Standby Letters of Credit and Guarantees.

What Is A Standby Letter Of Credit?

A Standby Letter of Credit or Guarantee is a written undertaking given by CIBC to the party with whom you have entered into a contract (the "beneficiary") to pay a specified amount of money in the event that you or a third party do not meet specific financial or performance obligations. Upon CIBC's payment to the beneficiary, you reimburse CIBC for such payment.

* A Bid Guarantee (Bid Bond) is normally required by buyers when they ask for tenders relating to a contract. It provides assurance to buyers that they shall be financially compensated in the event that you, the bidder, after being awarded the contract, do not take it up.

** A Performance Guarantee (Performance Bond) provides assurance to your buyers that they shall be financially compensated in the event that you fail to adequately complete the contract.

Key Benefits

Saves You Money

  • Eliminates or reduces the need to give the party, with whom you have entered a contract, cash collateral or other security to enter into the contract, and thus may improve your cash flow

Makes You Money

  • A bid or performance guarantee issued by CIBC Trade Finance may help you win contracts
  • May eliminate the need for you to prepay for products or services, which allows you to use the funds for alternative purposes before payments fall due

Saves You Time

  • CIBC Trade Finance has developed Standby Letter of Credit formats to meet a variety of scenarios. We can customize any of our formats to suit your needs or create a new one
  • CIBC Trade Finance can issue a Standby Letter of Credit on short notice

Convenient

  • CIBC Trade Finance has expertise in structuring Standby Letters of Credit and Guarantees to meet your business needs while protecting your interests

Please Note:
Products and their features may change at any time. This is a general description only; for more information call the CIBC Trade Finance Help Desk at 1-800-268-6331.

Trade Finance Disclaimers