Guarantees

A bank guarantee is the obligation of the bank to pay the designated person (the beneficiary – the lender of the applicant of the guarantee) a sum of money, the amount and terms of which are stipulated by the terms of this obligation. The basis for the payment is the written request of the beneficiary to the bank to pay the specified amount of money. The bank guarantee serves to ensure the proper fulfillment of the principal obligation of the applicant to the beneficiary, such as the fulfillment of the terms of the contract, the obligation to pay etc.

Domestic guarantee

Purpose ensuring the fulfillment of the obligations of a client of Tallinn Business Bank to third parties located in Estonia
Minimum limit 50 EUR
Maximum limit according to the clients risk limit
Minimum term 30 days

International guarantee

Purpose ensuring the fulfillment of the obligations of a client of TBB pank to third parties located outside of Estonia
Minimum limit 4 000 EUR
Maximum limit according to the clients risk limit
Minimum term 30 days

The bank guarantees the seller that the buyer (guarantee applicant) will pay the value of the goods in accordance with the contract of sale. By this type of a guarantee can be guaranteed as a one-time transaction, as well as a long-term (for example, 6-month) sales contract. The basis for the bank to pay the guarantee is the written request of the seller, confirming the fulfillment of his contractual obligations and the buyer’s failure to comply with the contractual payment obligation.

The subspecies of the payment guarantee is a customs guarantee issued in favor of the Customs Department, which ensures timely payment of customs duties and turnover tax.

The bank hereby guarantees the refund of the advance payment made by the buyer for the goods in case of non-fulfillment or improper performance by the seller (guarantee applicant) of the contractual obligation to deliver the goods. The prepayment guarantee is issued before the prepayment is made, but it comes into effect after it has been paid.
The bank guarantees the fulfillment of the contractual obligations of its client (the applicant of the guarantee). Obligations can be caused by, for example, a construction or privatization agreement. In this case, the guaranteed amount may be the sum of the penalty specified in the contract or other amount required by the beneficiary.

Terms and conditions

1. Application for a loan or guarantee may be submitted by a legal entity registered both in Estonia or a foreign country
2. The following requirements shall be met in order to get a loan or a guarantee:
2.1. Holding an account with TBB pank at least for the last six months
2.2. Using services rendered by TBB pank within the last six months is an advantage
2.3. The amount of monthly revenue into applicants account within three last months shall be at least equal to the monthly repayment amount interest incl. for the loan applied.
3. The ground for loan or guarantee to be granted is availability of proper collateral owned by applicant or the third person. The value of the collateral estimated by the appraiser approved by the bank shall exceed the amount of the loan applied.
The bank approves the following as possible collateral:

✓ time deposit with TBB pank

  ✓ bail or warrant of the third person

✓ mortgage

✓ pledge of other kind of real estate

✓ pledge

✓ pledge of movables

 ✓ pledge of securities

 ✓ revenues into the account with TBB pank

4. Interest is calculated basing on the year of 360 days

For further information,please contact loan manager by sending e-mail at laenuhaldur@tbb.ee

Required documents

✓ Foundation documents of a legal person:
  • Articles of association
  • Authorisation and licenses, if required pursuant to low

✓ Copy of the identity document of the representative of the legal person

✓ If there is a supervisory board, resolution (consent) of a supervisory board on appying for loan/bank guarantee and granting collateral
✓ Financial reporting:
  • Audited annual report for the previous financial year with an auditor’s report, if auditing is mandatory pursuant to law
  • Quarterly balance sheets and income statements of the current year that are not older than 120 days

✓ Business plan, if required

✓ Justification of need for a loan (for a short-term loan)
✓ Contracts related to the project to be guaranteed (bank guarantee)
 

In case of collateral security:

✓ An extract from the relevant register or Land Register regarding the collateral

✓ Contract of sale, acceptance and delivery report, commercial lease contract, etc

✓ The decision of property owner in writing to provide assets as security

✓ The power of attorney to sign the guarantee contract, if the contract is not signed by the property owner or his legal representative

✓ The valuation report of collateral issued by an appraiser accepted by the Bank

✓ Insurance policy for benefit of the Bank, issued by the insurance company accepted by the Bank (to be issued after the conclusion of the guarantee contract)

In case of suretyship /guarantee:

✓ Copy of registry card from Commercial register of a surety/ guarantor

✓ Copy of surety’s/ guarantor’s articles of association

✓ If there is a supervisory board, resolution (consent) of a supervisory board to provide suretyship/ guarantee

✓ Surety’s/ guarantor’s audited annual report for the previous financial year, if auditing is mandatory pursuant to law

✓ Surety’s/ guarantor’s quarterly balance sheets and income statements of the current year

✓ Copy of the identity document of the private person –surety/guarantor or copy of the identity document of the representative of the legal person- surety/guarantor

✓ Application form for private person-surety

✓ Application form for enterprices-surety/guarantor

✓ Private person- surety’s six-month account statement certified by the bank if income is not received in TBB pank

The Bank has the right to request additional documents needed in order to evaluate the client’s solvency. The Bank has also the right to request original documents of submitted copies. If the documents have not been prepared in accordance with the requirements of the Bank, they will be considered as not presented. The Bank is not obliged to justify a refusal to provide loan. The originals of documents submitted to the Bank are to be returned to the client. All other documents submitted along with an application will be kept by the Bank.

Requirements to insurance

1.1. Property that constitutes the security for the Credit Agreement or the Object of Lease must be insured with the insurance company accepted by the Bank until the Customer completely fulfils its obligations arising from the Credit or Lease Agreement under the minimum conditions stated in the present Procedure, depending on the type of the property.

1.2. It is allowed not to require the Customer to present the insurance policy in the following cases:

     1.2.1. a land plot without any buildings and without growing forest is used as the security for the Credit Agreement or as the Object of Lease;

     1.2.2. a plot with buildings that are not valuable, used as the security for the Credit Agreement or as the Object of Lease

     1.2.3. the credit/lease balance is lower than 10% of the cost of the immovable property that constitutes the security for the Credit Agreement or the Object of Lease;

     1.2.4. according to a decision of the Credit Committee and/or the Supervisory board of the Bank.

1.3. The first beneficiary stated in the insurance contract shall be the Bank or AS TBB liising.

1.4. The minimum conditions stated below shall be included in the insurance policy submitted to the Bank or AS TBB liising, and the owner of the property, at a request of the Bank or AS TBB liising, must submit all data and documents related to insurance of the property (including the list of the property).

2. Minimum requirements to insurance of the Property that constitutes the security for the Credit Agreement or the Object of the Lease Agreement (except for motor vehicles)

2.1. The insurance amount can be one of the amounts listed below:

     2.1.1. buildings and constructions (including flats) – the insurance amount many not be below their restoration cost;

     2.1.2. movable property (including cars, equipment and agricultural machines) – the cost of purchasing a new property (including VAT);

     2.1.3. other movable property (for example, ships) – the market value of the object;

     2.1.4. goods – the cost of replacement.

2.2. Property may not be insured at a lowered price.

2.3. Property must be insured at least against the following risks or under the terms and procedure described in the Credit/Lease Agreement:

      2.3.1. Real estate objects – fire, natural disaster (hail and storm, or hail and strong wind, etc), water leakage (or pipeline blow-out), vandalism.

      2.3.2. Forest – package insurance that in addition to forest fire covers damage caused by natural forces and wild animals;

     2.3.3. Goods (timber, metal), equipment, furnishing, cars and other movable property – fire, natural disaster, accidents at places of operation of machines, overturn and destruction of machines and illegal activity of third persons (theft, burglary and vandalism).

3.1. Motor vehicles that constitute the Object of the Lease Agreement or the security under the Credit Agreement must be insured with comprehensive insurance at all times until the Customer completely fulfils all its obligations arising from the Credit or Lease Agreement according to the minimum conditions stated below:

     3.1.1. Insurable value – the market value of the object;

     3.1.2. Obligatory cover of the following insurance risks – traffic accident, natural disaster, fire, vandalism, theft;

     3.1.3. Area of validity of the insurance contract – at least European countries (except for CIS countries).

MINIMUM REQUIREMENTS TO TRAFFIC INSURANCE OF A MOTOR VEHICLE

4.1. The motor vehicles that constitute the object of the Lease Agreement or security for the Credit Agreement must always have a valid traffic insurance until the Customer completely fulfils all its obligations arising from the Credit or Lease Agreement.

4.2. In case of movement of the vehicle beyond Estonia’s territory, it must be insured with and its driver must have the Green Card that confirms insurance cover also in the countries that are additionally stated in it.

5.1. In case of an insurance event the Lessee, the Actual Car User, the Borrower or the Owner of the security for the credit must undertake all measures for saving the property and avoiding its further damage, and to immediately notify the Insurance company and/or the Bodies of Legal Protection and/or the Rescue Service of the insurance event, and to notify the Bank/AS TBB liising within three calendar days of the damage caused to the property or of the circumstances related to its destruction.

6.1. The Borrower/Lessee undertakes to submit to the Bank/AS TBB liising the valid insurance policy within 7 calendar days following the start of financing of the Credit Transaction.

6.2. The Borrower undertakes to ensure constant insurance cover with regard to the pledged property and to present to the Bank the renewed insurance policy in a timely manner, i.e. 7 calendar days before expiry of the current insurance policy.

     6.2.1. If the Borrower does not submit the renewed insurance policy, the Bank has the right to insure the pledged property with an insurance company chosen by the Bank under the conditions described in the Credit Agreement. The Bank has the right to debit insurance payments from the bank account of the Customer in the Bank.

     6.2.2. In case of failure to submit the insurance policy in a timely manner, the Bank has the right to demand payment of the forfeit penalty in the amount designated in the Credit Agreement.

6.3. The Lessee undertakes to ensure constant insurance cover with regard to the leased property and to present to AS TBB liising the renewed insurance policy in a timely manner, i.e. 7 calendar days before expiry of the current insurance policy.

     6.3.1. If the Lessee fails to submit the renewed insurance policy 7 calendar days before expiry of the current insurance policy, AS TBB liising has the right to insure the leased property with the insurance company chosen by AS TBB liising under the conditions described in the Lease Agreement, and to demand from the Lessee compensation for the sustained damage.

     6.3.2. In case of failure to submit the insurance policy in a timely manner, AS TBB liising has the right to demand payment of the forfeit penalty in the amount designated in the Lease Agreement.

When ensuring property pledged in Estonia in favor of TBB pank, all registered in Estonia insurance companies that have been licensed by the Financial Supervision and published on a webpage are accepted:

Licenced Non-Life Insurance Companies in Estonia and Affiliated Branches of Foreign Insurance Institutions