Financial Guide for SMEs - SME Corporation Malaysia
Financial Guide for SMEs - SME Corporation Malaysia
Financial Guide for SMEs - SME Corporation Malaysia
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<strong>Financial</strong> <strong>Guide</strong> <strong>for</strong> <strong><strong>SME</strong>s</strong>Purpose Product Usage Features Benefitsuntil payment oracceptance hasbeen affected; andii. Once the bill isaccepted by thebuyer (drawee),the seller (drawer)can seek legalremedy in case ofnon-payment onmaturity date.<strong>Financial</strong> <strong>Guide</strong> <strong>for</strong> <strong><strong>SME</strong>s</strong>• Shows thecustomer’s/applicant’s capabilityto per<strong>for</strong>m work asspecified in thecontract.• Able to obtain morefavourable tradeterms from thebeneficiary if a BG isproduced.• There is noneccessity to raisecash to meet thedeposit requirementsand funds could beused to support• Types ofguarantees:i. Tender Guaranteeor Bid Bond;ii. Per<strong>for</strong>manceGuarantee;iii. AdvancePaymentGuarantee;iv. Warranty ofMaintenanceGuarantee;v. RetentionGuarantee; andvi. SecurityGuarantee.• Commission is• Provides guaranteefavouring a thirdparty <strong>for</strong>per<strong>for</strong>mance,payment etc.• Generally,businesses thathave a particularneed <strong>for</strong> BGs arecontractors, such asbuilding and suppliercontractors. On thecorporate side, BGscould also be given<strong>for</strong> the issuance ofprivate debtsecurities.BankGuarantee(BG)GuaranteesA guarantee is basicallya legal undertaking by afinancial institution onyour behalf (the thirdparty), where itguarantees thepayment of a certainsum of money up to acertain limit to abeneficiary, in the eventthat your business failsto settle a debt orper<strong>for</strong>m a legalobligation. This ishowever subject to full9999chapter 7-13 p79-181 Eng.indd 998/15/11 5:02:57 PM
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