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Cheaper Bank Guarantees

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  • 19-03-2017 9:30am
    #1
    Jonny303
    Registered Users Posts: 633 ✭✭✭


    Hi,

    Just wondering if there any other options out there than your regular bank for bank guarantees?

    Currently paying 2% with AIB for 5 guarantees, from €500 to €30,000. Supplier dictates that a guarantee is required so just wondering is there any other options?


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    #2
    Bandara
    Registered Users Posts: 3,282 ✭✭✭Bandara


    Jonny303 wrote: »
    Hi,

    Just wondering if there any other options out there than your regular bank for bank guarantees?

    Currently paying 2% with AIB for 5 guarantees, from €500 to €30,000. Supplier dictates that a guarantee is required so just wondering is there any other options?

    I'm going from memory here but as far as I remember the differences between the banks is huge

    I obtained some BGs in 2013 for a new business and went to all the banks etc. BOI were 3%, AIB were 2%, Ulster Bank were 1% !

    Furthermore the security required by each was vastly different, the total of the BGs was €120k with an extra €10k CC provision. BOI wanted €110k (despite the fact that I have another very successful business with them for 15 years), AIB couldn't decide what they wanted so we cut them loose, UB did the whole thing for €60k security which was very low.

    I personally have found AIB to be very amateur in any dealings with them, as a result have never gone into business with them for anything.

    UB I like as they are quite removed and you get a lot more leeway than BOI who are afraid of their own shadows.

    As an aside with the smaller guarantees I normally give the supplier a cheque rather than a guarantee. I realise it affects your cash flow initially but it keeps you lighter on your feet documentation wise (which helps if your going for an OD or loan at a later date) and your not paying constant rolling fees.

    Finally, don't be afraid to go back to your suppliers once you have proven yourself to be a good payer and tell them you want the BGs reduced. There is no reason you can't get them down by (for example) a third which reduces your exposure a fair bit. Not to mention the fee savings.

    Hope that's of some help.


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    #3
    Jonny303
    Registered Users Posts: 633 ✭✭✭Jonny303


    Thanks for the feedback. Must look around and see. Truth be told the cash is there to cover them, sitting in a current account earning nothing!


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