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Bank guarantees and surety bonds

Bank guarantees, surety bonds, and similar products are what are known as conditional commitments, which means that the bank will fulfill the guarantee only if certain conditions are met. These guarantees are a good way of assuring your contractual partners that you are reliable and financially stable without you having to tie up your funds upfront.


  • BCV makes a commitment to a creditor, such as a supplier, at your request and on your behalf (or on behalf of a third party) to pay a certain amount provided that the conditions set out in the guarantee are met.
  • By using BCV for this type of transaction, you have the backing of a bank that is recognized for its solidity – all at a low fee for you.
  • Our bank guarantees are only available to clients residing in Switzerland.

Examples of the most common guarantees

Building contractor’s guarantee

This type of guarantee is for construction projects. It replaces the 10% that project owners usually withhold in the event of any hidden flaws that may appear for a certain period after the work is completed. The project owner may demand payment of the amount of the guarantee if the flaws are not corrected. The guarantee period is generally between two and five years following the end of the building work. Similar guarantees exist in manufacturing, to ensure that machines sold by a supplier work properly.

Warranty bond or performance bond

This type of guarantee ensures that a supplier of goods or services meets all its contractual obligations. It normally represents 10% of the contract value. The guarantee will go beyond the end-date stipulated in the initial contract in order to cover any subsequent flaws found in the product or service.

Advance payment guarantee

In this case the bank makes a guarantee to the buyer of a product or service that any advance payments made to the seller will be reimbursed if the seller does not fully meet its contractual obligations. The guarantee period will go beyond the delivery date stipulated in the initial contract in order to cover any subsequent flaws found in the product or service. This type of guarantee comes into effect when the advance payment is paid into the seller's account.

How they are issued

Direct guarantees

BCV issues the guarantee directly to the beneficiary, if necessary via a third-party bank for authentication.

Indirect guarantees

The beneficiary may request, or be legally required, to only accept guarantees issued by the beneficiary's bank. BCV, as the applicant’s bank, will then issue a counter-guarantee to the beneficiary's bank in order to cover the commitment.

The two main types of guarantee

Bank guarantees

A bank guarantee is a legal commitment that is separate from the original contractual obligation. It is payable upon written request by the beneficiary and upon submission of the confirmation required by the guarantee, and no objections can be made.

Bank guarantees are commonly used because they are extremely versatile – they can be used in almost all situations, on either the Swiss or international market.

Upon request, bank guarantees can be made subject to the International Chamber of Commerce's (ICC) Uniform Rules for Demand Guarantees (RUGD 758).

If the applicant does not meet its contractual obligations relating to the guarantee, the beneficiary may request payment.

In most cases, a written statement by the beneficiary made within the guarantee period is enough to receive payment.

For indirect guarantees, the request for payment must be submitted to the beneficiary’s bank. That bank will make the payment immediately if the request is valid. That bank will then receive payment in return through the counter-guarantee.

Surety bond

Surety bonds are governed by Article 492 of the Swiss Code of Obligations and therefore can only be used to guarantee the claims of Swiss creditors. The difference with bank guarantees is that surety bonds are dependent on the original contractual obligation; this is known as accessoriness. Surety bonds may be simple or joint and several. And the applicant can make exceptions and objections to any demand for payment.

If you have a credit limit that allows bank guarantees or surety bonds to be issued, you can submit your application directly to us using the forms available below under "Useful Documents."


Learn more

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Useful documents

If you have a credit limit that permits the issuing of guarantees or surety bonds, you can submit your application directly to us using the forms available below.

 *Our bank guarantees are only available to clients that reside in Switzerland.