In international trade, it is quite common for the parties not to know one another very well and there may also be unknown incompatibilities in different countries’ currency-control and foreign trade regimes which creates uncertainties and risks for both sides. The seller wants to ensure the collection of receivables, while the buyer wants to ensure that the goods or services are delivered on time.
We secure you with our foreign trade products:
A letter of guarantee is a surety bond, addressed to a government agency or organization, or other natural or legal entities, in which we pledge to pay a stipulated amount under stipulated terms and conditions in the event that a contractor fails to fulfill some specified contractual obligation or duty.
- From the obligor’s perspective, going into business by receiving a letter of guarantee from a reputable bank.
- From the addressee’s perspective, having a guarantee of compensation if the work is not completed.
Fortress Bank International Banking Unit Ltd. is often asked to provide Guarantees or Bonds on behalf of its customers, who may be importers or exporters, traders, middlemen, or possibly contractors who have to give some form of undertaking to their counter-parties. The Guarantee is a written undertaking from a bank that if a customer does not honor an obligation to perform a particular function or service, the bank will pay over a sum of money on behalf of that customer to a named party.
Bank Guarantees or Bonds can be Conditional or Unconditional. When a guarantee is conditional, that anyone who wishes to claim under that guarantee must fulfill certain conditions before the guarantor is prepared to pay the appropriate sum to the beneficiary. When a guarantee is a simple demand guarantee, this means that the beneficiary named in the document is able to claim the benefit stated in the guarantee by simple demand.
How does it work?
The applicant fills an application form for issuance of a bank guarantee in which he specifies the name of the beneficiary, tenor, amount, expiry date, and purpose of guarantee. The most commonly used guarantees are Bid / Advance payment / Performance bonds / Customs guarantee and Payment guarantees.
- Access to Fortress Bank International Banking Unit Ltd.’s network
- Experienced and professional trade processing service
- Competitive Issuing fees
Letters Of Credit
Letters of Credit are as old as banking itself. They are based upon the fact that the creditworthiness of an unknown Buyer is thus replaced by the creditworthiness of a known Bank. Fortress Bank International Banking Unit Ltd.., often has to stand in the shoes of its customers and give some form of undertaking that payment will be made provided certain conditions are complied with. This mechanism is called as Letter of Credit or Documentary Credit. Although there are various types of Letters of Credit, people are most likely to be familiar with the terms Import or Export Letter of Credit. These terms are used when Fortress Bank International Banking Unit Ltd. is acting for an importing or exporting customer.
How does it work?
When a Buyer applies for an Import Letter of Credit it specifies the Exporter, the amount, the Currency, the maturity date, the nature of goods, as well as any other payment terms. The Exporter in his country is then advised that a Letter of Credit has been opened in his favor, therefore he is the beneficiary of an Export Letter of Credit. Therein, the Exporter ships the goods to the Importer and presents all the required documents to the bank. The bank checks the documents for complying with the Letter of Credit and makes payments to the Exporter. In the end, the bank claims a settlement from the Importer.
- Access to a Global Trade Network
- Experienced and Professional Trade processing service
- Availability of financing against Assignment of Export Letters of Credit.
Letters Of Reference
Letters of reference are generally issued for credible customers who engage in construction and contracting work. When a Buyer applies for an Import Letter of Credit it specifies the Exporter, the amount, the Currency, the maturity date, the nature of goods, as well as any other payment terms. The Exporter in his country is then advised that a Letter of Credit has been opened in his favor, therefore he is the beneficiary of an Export Letter of Credit. Therein, the Exporter ships the goods to the Importer and presents all the required documents to the bank. The bank checks the documents for complying with the Letter of Credit and makes payments to the Exporter. In the end, the bank claims a settlement from the Importer.
- It is issued by our relevant units at the Headquarters and delivered to the designated parties upon the company’s request.
- Reference letters can be issued in terms of TL or foreign currency.
Export factoring is a form of international trade financing method in which an exporter’s existing or future receivables shown in an invoice or other documents proving that goods or services have been sold are assigned to a factoring company, who assumes the responsibility for collecting the payments. In export factoring, the factoring company, for a certain fee and commission, pays the exporters who make cash against goods sales the value of the sale.
Factoring provides a collection guarantee and cash flow.
Pre-financing Loan is a type of loan used to finance the purchase of goods and services in sales and deliveries that qualify as exports and other foreign currency generating activities. Pre-financing loan is obtained by a vendor itself from its buyer in another country or from international markets and is made available through a bank or a private financial institution, which may or may not act as a guarantor.
International Money Transfers
Fortress Bank International Banking Unit Ltd. provides fast and error-free international money transfer services in all major currencies for your business transactions.