A bank guarantee is a commitment issued by OP on your company's (the guaranteed party’s) behalf, in favour of your contractual partner: as the guarantor, the bank agrees to compensate your partner for you, if necessary. Bank guarantees generally serve as collateral, covering the fulfilment of contractual obligations in Finnish or foreign transactions. If breach of contract occurs, your contractual partner (the beneficiary) can demand payment from OP in accordance with the terms and conditions of the bank guarantee.
- A bank guarantee may be given as collateral for advance payment, performance, payment of the price of goods or services, a guarantee period or fulfilment of another contractual obligation. Bank guarantees of this kind are known as commercial guarantees.
- You can also use a bank guarantee to fulfil a collateral obligation required by regulations or law. Examples include guarantees given to Customs, guarantees referred to in the Package Travel Act or Land Extraction Act, and transport licence guarantees.
- A bank guarantee includes a brief description of the commercial obligations between your company and its contractual partner, which form the substance of the guarantee. It also states the maximum amount guaranteed, the guarantee’s expiry date and the terms on which the bank will pay the sum demanded by the beneficiary.
- You can also apply for a bank guarantee via our online service. This is an easy and secure way of ordering a bank guarantee and viewing the latest information about your company’s guarantee portfolio. To use our online services, your company must have an agreement with OP. See below for further details on our bank guarantee online service.