Commercial security is necessary in certain areas to secure the commercial relationship between business partners. A commercial security is a guarantee that is concluded between a trustee and an enforcer of a commercial exchange.
The law determines clear rules for the establishment of certain types of commercial guarantees. You have to be particularly careful when you work with an international partner. You have to be sure that the money of a guarantee fulfills the established conditions.
Being established guarantees you need to work with a bank or an insurance company that proposes this service. The choice of the partner impacts your business when you choose a reliable partner with a good reputation, the potential commercial partners will be then more interested in working with your company. They will be sure that you will pay or deliver the merchandise like stipulated in the commercial security.
The mandatary wants to be sure that the contract will be completed. It then requires a bid bond. This is an engagement to pay an amount of money to the mandatary if the contract is not fully completed. A bid bond ensures the seriousness of a company.
In a commercial trade with a delivery, it's common to conclude a delivery guarantee. The trustee wants to receive the merchandise. If not, the enforcer has to pay an amount of money to the trustee.
In the construction area it's common to make performance bond. The mandatary wants to be sure that the construction company will finish the building in the way it's defined by the construction contract. The performance bond is a guarantee that allows the mandatary to claim money if he notices faults or if the work is not finished.
There are a lot of commercial securities, that are asked from the trustee or the enforcer of the commercial exchange. If you want advice to conclude a guarantee for your business or SME, don't hesitate to fill in our form. One of our advisers will contact you to propose you a free non-binding offer.Online request