Uncover how bank guarantees and letters of credit help reduce risk in commercial and real estate transactions by ensuring borrower obligations. Learn their differences.

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Eric's career includes extensive work in both public and corporate accounting with ...

A bank guarantee is a pledge by a bank to assume liability for a sale or contract between a buyer and seller. The buyer applies to the bank, which assesses the buyer’s ability to fulfill the contract ...