Risk Management
Risk management can give you control in an uncertain world.
Risk management can give you control in an uncertain world.
A bank guarantee can minimise the risk to your business when, for example, dealing with customers, suppliers or landlords. Here you can read more about when a bank guarantee is relevant and you can find out more about the different guarantee types you can choose from.
A bank guarantee can be a good tool for your company if you need to minimise risks when making arrangements. When your company closes a deal with a customer, supplier or landlord, a bank guarantee can be part of the agreement. The purpose of the guarantee is to protect one or both of the parties against loss.
Sometimes a party requires a bank guarantee if it is to conclude such an agreement at all. This often occurs in connection with commercial leases, where the landlord usually demands a bank guarantee amounting to 3-6 months’ rent.
A bank guarantee means that the bank assumes a risk on behalf of your company by standing surety for the payment. For this reason we conduct a credit assessment before providing a bank guarantee, just like we do when we are granting loans and credit.
Read more about the different types of guarantee or contact us for advice.
Cross-border trading involves a number of risks. We have specialised solutions that can help you manage them. Read more about how we can assist you in the field of international trade. (link to life event ‘Trading internationally’)
Trading with countries in the West is relatively safe. However, exports and imports can involve higher economic risk. You are far away from clients and suppliers – physically, legally and culturally. And if you deal with politically and economically unstable countries, it is wise in any case to obtain extra assurance.
International trade forms
If you have to use forms for export and import letters of credit, guarantees etc. in connection with international trade, you can find them here.
Danske Bank offers several ways of minimising country, supplier and customer risks. Feel free to ask our trade finance consultants for advice and guidance. In 2015, for the fifth year in a row, we were ranked Best in Trade Finance in the Nordic region by the research institute TNS SIFO Prospera.
Danske Bank offers a variety of payment methods and hedging instruments:
Documentary credits
The documentary credit is one of the most secure payment methods in international trade, offering the exporter a conditional payment guarantee from the importer’s bank. Documentary credits usually require the presentation of certain documents, which must be complied with before payment can take place. You must be aware that banks examine the documents only with respect to the documentary credit and do not look at contracts, agreements or the condition of the goods.
Bank guarantees
A guarantee is a written undertaking by a guarantor, usually a bank, to ensure that a supplier or contractor receives compensation in the event of a breach of contract. There are several different types of guarantee, and more than one type can be included in a contract.
Documentary collections
Documentary collections can provide exporter and importer with a compromise between open account trading and documentary credits.