Standby Letters of Credit and Guarantees
CIBC can help you prepare the documentation necessary to facilitate all your contractual transactions.
CIBC Standby Letters of Credit and Guarantees could be for your company if:
- you have or are about to enter into a contract with another party.
- you need to conserve your cash resources by eliminating or reducing the need to give your counterparty cash collateral, prepayment or other security, thus conserving your cash resources.
Bid, Performance and Advanced Payment Guarantees
- Bid or Tender Guarantee - To ensure that suppliers submit credible offers, buyers may request a Bid Guarantee to accompany a tender. Bid or Tender Guarantees provide buyers with the assurance that they will be financially compensated in the event that a bidder does not take up the contract once it has been awarded.
- Performance Guarantee - Once awarded the contract, you may be required to assure your customers of your ability to meet your contractual obligations. This may require you to submit a Performance Guarantee for a percentage of the contract amount, guaranteeing your customer this level of financial compensation in the event that you fail to perform as contracted.
- Advance Payment Guarantee - If your contract provides for payment of stipulated amounts in advance of the work being completed, a CIBC Advance Payment Guarantee will assure your customer that they will be repaid the funds advanced in the event that you fail to complete the contract.
Retention Guarantee/Advance Payment Holdback Under Contract Guarantee
Your customer may be entitled to hold back payment of a percentage of the contract amount for an extended period after the completion of the project, to ensure performance of post-contractual obligations. Your customer may, however, be willing to release payment prior to the end of the holdback period against receipt of a guarantee covering repayment of the released funds in the event that you fail to meet your specified post-contractual obligations.
CIBC also issues Standby Letters of Credit and Guarantees to provide payment assurance and to facilitate common business or personal transactions such as borrowing money, purchase or lease agreements, utility service contracts, and more.
In addition to Standby Letters of Credit and Guarantees, CIBC Global Transaction Banking offers a range of other products and services to help you create, protect, and realize value in your business. Our products are designed to facilitate domestic and international trade transactions, help you mitigate foreign buyer risk, accelerate cash flow, and provide trade-related financing. Our trade experts can provide assistance in negotiating the financial aspects of your contract, share their knowledge and experience of local and foreign markets, and answer any questions you may have about our products.
Your success means the world to us®
We are here to help you structure your transactions and offer creative financial and business solutions to suit the immediate and long-term trade-related needs of your company.