Guarantees and Letters of Credit
It is possible to conduct business safely even in an unstable market. Stay at ease and ensure your business with appropriate guarantees.
What is a guarantee?
- A guarantee is a security instrument ensuring the proper fulfillment of obligations arising from a contractual relationship, whereby the Bank undertakes to pay the claim of a third party (the beneficiary of the guarantee) up to the specified amount of the guarantee, in the event that the client fails to perform the agreed obligations or make the required payment.
How to obtain a guarantee?
- All required documentation must be submitted:
- Loan application
- Official financial statements for the previous three years, along with an interim report for the current year.
- Customer and supplier ledgers as of December 31, and an interim overview for the current year.
- An overview of liabilities to suppliers as of December 31 of the previous year, and an interim overview for the current year.
- List of real estate offered as collateral, along with an appraisal of the value of movable and/or immovable property.
- Auditor’s report, if required, for the last three years.
- Consent for access to the Credit Registry of the Central Bank of Montenegro (RKR).
- Depending on the loan repayment term, one of the following documents must also be submitted:
- A business plan covering the period for which the loan is requested.
- Projected balance sheet and income statement for the period for which the loan is requested.
- Depending on the term and type of transaction, a contract with the buyer or supplier must also be submitted, or a document that may serve as the basis for issuing a guarantee.
What are letters of credit?
- A documentary letter of credit is a security and payment instrument primarily used in international payment transactions.
How are letters of credit secured?
- All required documentation must be submitted:
- Loan application
- Official financial statements for the previous three years, along with an interim report for the current year.
- Customer and supplier ledgers as of December 31, and an interim overview for the current year.
- An overview of liabilities to suppliers as of December 31 of the previous year, and an interim overview for the current year.
- List of real estate offered as collateral, along with an appraisal of the value of movable and/or immovable property.
- Auditor’s report, if required, for the last three years.
- Consent for access to the Credit Registry of the Central Bank of Montenegro (RKR).
- Depending on the loan repayment term, one of the following documents must also be submitted:
- A business plan covering the period for which the loan is requested.
- Projected balance sheet and income statement for the period for which the loan is requested.
- Depending on the term and type of transaction, a contract with the buyer or supplier must also be submitted, or a document that may serve as the basis for issuing a letter of credit.
