By - Anna Torres

A Bank Guarantee Vs a Bond: What’s The Difference?

From guarantor loans to bank bonds, everyone is looking for some form of credit. Borrowing money is a necessity in today’s world and it’s all because of modern life and lifestyles. Buying a car outright is not always a possibility and in business, being able to afford the latest computer equipment or machinery is difficult. No matter who you are, you may require credit, but which is the one for you? Bank guarantees and bonds are common, but what are the differences between the two and will you be eligible for them?

Bank Guarantees

A bank guarantee is also known as a letter of credit. Banks or financial institutions may create a bank guarantee where a financial institute promises that the borrower will be able to repay the money and if they don’t, they step up and take on the burden or repayment. Essentially the banks or financial institutions promise the borrower has the ability to repay a loan. Its protection should a party of the contract fail to meet their specified obligations. You can look for guarantor loans online, but in business, bank guarantees may be a more suitable option in some circumstances.

Bonds

A bank bond may also be known as a surety bond. This is quite different from a bank guarantee, in which it is used as protection for a party of contract. If a broken contract takes place, the other part can be compensated for the loss they have received. For example, a computer software company wants new fixtures installed and calls in an electrician; the software company can choose to take out a surety bond if they believe the electrician will damage their property. Should the electrician damage the office, they can be compensated through the surety bond. Also, the electrician can take out a policy to ensure if there is a refusal of pay, they’re paid by the bond. Like guarantor loans there is an element of security for both sides. See more!

Which Do You Need?

It depends on the type of business you have and the contract in which you’re entering into. For example, if you have invested in services coming into the business premises then it may be that a surety bond is more appropriate on this occasion. However, if you’re doing a business deal between two parties and want to guarantee payment, a bank guarantee may be more suited. Again, it’s going to depend on the exact circumstances and requirements. You can look at guarantor loans online but they might not be tailored to your individual or business needs for the moment. If you’re unsure, get some advice from a professional.

Choose Your Security Wisely

Businesses have to protect themselves at every turn, because you never truly know what’s out there. You don’t know if the person you go into agreement with will fail to deliver on its goods or services, or what it promises. Also, you can’t be sure if the third party entering your business to do some simple installations will cause thousands of dollars worth of damage. It’s about protecting yourself. You don’t want to be liable should something go wrong. Have the best protection and while guarantor loans might seem useful, you have to look at all options from surety bonds to bank guarantees. For more information visit: https://en.wikipedia.org/wiki/Unsecured_guarantor_loan

By - Anna Torres

Where to Find Guarantor Loans Online

Guarantor loans can help you take control of your finances so you can work towards a brighter future. They provide you with the cash you need to move forward at your own pace. Here are some ways you can find guarantor loans online.

FCA Authorized Loan Broker

One of the ways to find a guarantor loan is through a broker. A broker acts as an agent on behalf of different lenders. They use their expertise to help you find the best deal that will suit your preference.

Pros of Using a Broker

Looking for financing options can be quite exhausting as you have to research and find the best deal that is right for your needs. Going through a broker can help to save you from this stress as you would just need to approach them and tell them what you need. The broker will then help you to find the best deal, saving you a lot of time in the process. You can get the finance you need quickly so you can move on with your life.

Cons of Using a Broker

One major disadvantage of using a broker is they may not be always impartial. There are times financial lenders will offer brokers better rates and other financial incentives. The lenses do this so the brokers will help to push more customers to them. This means the broker doesn’t always have your best interest at heart. So it is important to thoroughly check what is in the financial agreement before signing it. You can read other customers review to make sure they are a responsible lender. Another disadvantage is that many lenders usually apply arrangement fees to the agreement. This levy is by the lenders so the broker is helpless in this situation. When signing a financial agreement form the broker you have to know the overall cost of borrowing. Check here.

How to Research a Broker

There are brokers everywhere but the best place to find them is on the internet. There are several loan comparison sites that will show you the best deal. Although, you will still have to work out the best loan for you most of the legwork is already completed. One thing to look out for when choosing a broker is if they are FCA authorized.  This will ensure you are not dealing with a bad company.

Going Directly to a Lender

Another option to get a guarantor loan is to go to the financial lenders directly. Although this process can be time-consuming it is sometimes the best option if you want to get a good financial agreement that works for you. When looking for a financial lender try to get enough information about how their process works as much as you can. A great way to do this is through reviews, this will give you valuable insight into how the application and review process works.

Pros of Going Directly to a Lender

There are no middlemen or surprise fees to pay. Most lenders are very transparent and upfront about any fees.

Cons

A major disadvantage of using this option is that it can be very time-consuming. This is because you will need to research and compare all the different lenders. Also, if you don’t understand the marketplace well you may miss out on a good deal because you were not looking in the right place.

It is important to be happy with the financial agreement you are offered. So keep in mind that if it sounds too good to be true it probably is. Remember to be always realistic about your financial situation. Click here for more information: https://www.trusttwo.co.uk/borrowing-from-us/what-is-a-gua