Home / All services / Bank Guarantee & Letter of Credit
Trade instruments · not a term EMI
BG and LC for tenders and trade
A bank guarantee when someone needs your performance or bid secured. A letter of credit when a supplier needs the bank’s promise before they ship. Neither is a working-capital loan in disguise.
Indicative ticket
₹1 Lakh – As per WC package
Tenure
As per tender / LC usance
Security
Cash margin + WC security as per bank
Category
Trade finance
Trade finance
Bid, performance and financial bank guarantees plus letters of credit — everyday non-fund tools for MSME contractors, manufacturers and traders.
Non-fund limits so you can tender, take advances or import. You pay commission and margin until a claim or negotiation — not a full term EMI.
Contractors often cannot bid without a bid bond BG. Importers cannot move cargo without an LC. These are trade-finance tools — not a substitute for a machinery term loan or a gold loan.
We map BG/LC into the existing CC/OD or a fresh non-fund line so the unit is not using a personal OD or cash EMD for every tender. That mismatch is how working capital quietly disappears.
Types matter: bid bond, performance, advance-payment and financial guarantees have different margins and tenors. Sight vs usance LC changes cash timing for imports.
Sanction still needs GST, banking and a real tender or purchase order. A photocopy of an old bid is not enough. Rate and margin stay with the issuing bank.
Bid, performance, advance, retention. The beneficiary’s format matters. Margin and existing limits decide whether the bank will issue. A BG is not ‘free extra WC’.
Sight or usance, domestic or import. Documents must match. Discrepancies are how MSMEs lose both goods and limits. We map LC vs supplier credit vs CC before you open one for a one-off crate.
A BG is typically non-fund until invoked — then it becomes a funded problem. Commission and cash margin or residual security decide whether the bank will issue. The beneficiary’s wording is not ‘standard’; mismatched formats bounce.
An LC is a purchase tool. Packing credit is a pre-shipment funded tool. Invoice discounting is a receivables tool. Three different pages. We will not open an LC because WC felt slow.
Unlike packing credit, BG/LC is an instrument with commission and margin, not a funded EMI. Unlike CC, the limit is often non-fund until invoked. Unlike invoice discounting, LC is about the purchase, not your receivable.
Typical desk timeline: 2–5 weeks depending on limit type
Create your MSME desk account or log in. Tell us city, Udyam band, turnover range and the purpose of funds in one clear sentence. Consent is recorded before any lender share.
Bid bond, performance BG, financial BG or import LC. Beneficiary, amount, validity and margin are captured from the tender or PO.
Some BGs sit on existing CC limit; others need fresh sanction. Commission and margin are explained before issuance.
Promoter KYC, Udyam, GST, banking and purpose papers are listed product-wise. You upload once to the vault; we tell you what is missing before the file goes to credit.
The file moves to a partner bank, NBFC or HFC that matches your profile. Queries on GST vs banking, end-use or security are coordinated with you — we do not promise sanction from this website.
Bank issues the instrument per format required by the beneficiary. Invocation is separate from EMI — only if the guarantee is called.
Quick apply for Bank Guarantee & Letter of Credit without creating an account — or login if you want vault KYC and status tracking on your desk.
Only if it is invoked. Until then it is a non-fund limit with commission and cash/security margin.
Most banks prefer an existing WC relationship. Standalone BG is possible at some desks but margin and scrutiny are usually higher.
LC is a payment/assurance instrument for trade. Packing credit funds pre-shipment production. Exporters often need both in a season.
Figures are indicative. Not an offer. Sanction, rate and security rest with the bank, NBFC or HFC. Scheme names are not a website promise.
← All MSME servicesQuick apply without an account, or login for full apply with KYC vault and tracking.
