How to trade confidently with digital Guarantees

As well as helping businesses to win contracts at home and abroad, Guarantees can also help to reduce risk in the trade cycle and offer security when trading.

Given that digital transformation is reshaping trade finance, it’s now easier and more efficient than ever to use a Guarantee. Lloyds Bank has introduced a new digital solution aimed at simplifying the application process for Guarantees and Standby Letters of Credit. While the solution is available for all corporate clients, it is particularly beneficial for SMEs and mid-sized corporates who may use Guarantees less frequently and aren’t users of our Lloyds Online Trade Services portal.

Back to basics: Why use a Guarantee?

Guarantees can help to reduce risk at various stages of the trade cycle and enable you to:

·?????? Win commercial contracts with new buyers overseas. Our international network of correspondent banks can support the issue of Guarantees via your buyer’s local bank.

·?????? Provide your clients, industry associations and government bodies with security in relation to your payment obligations to them. This includes your obligations to industry bodies such as the Association of British Travel Agents (ABTA), and duty obligations to HM Revenue and Customs (HMRC) and foreign tax authorities.

·?????? Support a contracted deal in the UK, using a Guarantee or performance bond issued directly from Lloyds Bank to your clients.

This means that as a seller/exporter, a Guarantee can strengthen credibility with the buyer and may allow you to negotiate better terms and conditions in the trade agreement. On the other hand, as a buyer/importer, a Guarantee is a reliable, efficient and convenient way to provide security to your seller in relation to your payment obligations. A payment Guarantee may allow you to negotiate longer or more favourable payment terms.

Click of a button: How can I apply for a digital Guarantee?

The manual, paper-based process of preparing Guarantees often leads to delays, inefficiencies and errors. By digitising the application process, Lloyds Bank aims to minimise these issues and make trade cheaper, faster, and more efficient.

To begin the application process, access the new application forms via our website . They include various checks to ensure all necessary information is provided upfront, reducing the likelihood of omissions and the subsequent need for additional communication to correct mistakes.

Our digital journey makes it simple to enquire about, apply for, amend and request cancellation of Guarantees in an intuitive and seamless manner.

The digital journey: A paper-free issuance process

Digital Guarantee Issuance allows Lloyds Bank to provide digital Guarantees and Standby Letters of Credit in a completely paperless manner – without the need for printing large volumes of documents and sending them via a courier. Instead, the documents are now sent directly to the beneficiary by email as a PDF, ensuring instant delivery and reducing reliance on paper. This creates a faster, more efficient and more sustainable experience for businesses that trade.

This process is another step in our journey to make your trade experience paper-free, building on our adoption of Digital Collections, Digital Promissory Notes and Electronic Bills of Lading .

A focus on innovation in Trade

“In Trade, over the last few years, Lloyds Bank has made great strides in simplifying and digitising customer journeys, delivering innovative and pioneering solutions, by harnessing new technologies and legal frameworks,” said Surath Sengupta , Managing Director, Head of Trade and Working Capital Innovation and Transformation at Lloyds Bank.

“From delivering our landmark digital transactions in the documentary trade space to launching our Trade Tracker, which gives clients real-time visibility of their transactions, our focus has always been on solving our clients’ pain points. We have co-created with our clients an end-to-end digital journey for our Guarantees offering, making it simple and intuitive for our clients to self-serve from the first point of enquiry through the issuance and all the way to cancellation.”

To access our digital application forms, or to learn more about the Guarantees and Standby Letters of Credit we offer, please visit the Lloyds Bank website . Interested in finding out how Lloyds Bank is digitalising trade and how you and your clients can benefit as a result? Contact us at [email protected] .

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number 119278.