Guarantees

Our Letters of Credit and Guarantees facilitate your corporation’s trade and operations.

Guarantees

We issue Standby Letters of Credit on your behalf to serve as a guarantee that you will meet the criteria.

Standby Letters of Credit

We issue Standby Letters of Credit on your behalf to serve as a guarantee that you will meet the criteria of a specified contract with a beneficiary. If you default, the beneficiary may draw funds against the Letter of Credit as penalty or payment, as per agreed terms.

Letters of Guarantee

We can provide Letters of Guarantee at your request to pay your beneficiary a specific sum within the validity period of the guarantee.

Guarantees we can offer you include:

  • Tender or Bid Bond: this guarantee is required by a company for participation in a tender. It must be submitted to the beneficiary along with the offer. The usual guarantee amount is between 1% and 5% of the tendered amount.
  • Performance Bond: Alawwal (the guarantor) undertakes, at your request (as applicant), to pay to the beneficiary the guaranteed amount in the event that you cannot meet or sufficiently fulfill your contractual obligations. The usual guaranteed amount is between 5% and 10% of the contract value.
  • Advance Payment: when you (the supplier) receive funds in advance from a beneficiary (the buyer), an Advance Payment Guarantee may be issued to cover the transaction. This guarantees that in case you (supplier) fail to perform your contractual obligations, the beneficiary (buyer) will be paid the advanced amount on first demand by us.
  • Payment Guarantee: this is issued to guarantee your payment obligation based on the terms outlined in a debt agreement. It is often used to cover the non-payment of debts arising under a transaction or over a period of time. Such guarantees generally run up to the final scheduled date of payment, plus a grace period to allow the beneficiary to make demand in the event of non-payment.
  • Customs Guarantees: in certain import cases you may be required to submit a bank guarantee to gain an exemption of import duty. At a later stage, if customs (Government) finds default on fulfilling the obligation of the importer, as per the agreed terms and conditions, customs collects the duties or taxes under the said import shipment by forfeiting the bank guarantee.
  • Credit Facility Guarantee: we provide this guarantee favoring a creditor (lender) to cover the risk of default by the debtor (borrower).

Contact Us

Central Region – Riyadh
Tel: +966 (0) 11 4067888 Ext. 1215/1249/1459
+966 (0) 11 5115252 Ext. 1155
E-mail: ca-tradeadvisory@alawwalbank.com

Western Region – Jeddah
Tel: +966 (0)12 2368844 Ext. 2623
E-mail: wa-tradeadvisory@alawwalbank.com

Eastern Region – AlKhobar
Tel: +966 (0)13 8957444 Ext. 3323/3324/3326
E-mail: ea-tradeadvisory@alawwalbank.com

Customer Support
Toll-free number: 8004400020

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Alawwal Bank