Non-Fund Banking InstrumentsNon-Fund-Based

Fulfill High-Value Contractual Obligations Without Locking Up Cash

Comprehensive institutional bank guarantees accepted pan-India by PSU departments, state utilities, and blue-chip corporations. Specially structured for Indian growth enterprises and mid-market corporates requiring debt funding from ₹1 Cr to ₹500 Cr.

Target Quantum₹1 Cr – ₹500 Cr
Facility Tenor1 to 5 years
Facility NatureNon-Fund-Based
Lender Network50+ Banks & NBFCs
PRODUCT OVERVIEW

Bank Guarantee (BG)

In EPC contracts, government procurement, turnkey projects, and high-value supply agreements, clients require bank commitments guaranteeing that contractual milestones will be executed successfully or advance payments protected.

Providing cash deposits for tenders or advance mobilization locks up critical working capital. A Bank Guarantee (BG) fulfills this requirement by having a scheduled commercial bank issue an irrevocable undertaking on your behalf.

SME PAISA structures Performance Guarantees (PBG), Financial Guarantees, Advance Payment Guarantees (APG), and Bid Bond Guarantees with reduced cash margins (10%–15%) and lowest annual commission slabs across top Indian banks.

Key Strategic Benefits

Bid for multi-crore PSU, railway, highway, and corporate tenders with minimal cash lock-in
Replace cash Earnest Money Deposits (EMD) and retention money with bank instruments
Obtain mobilization advances from project clients via Advance Payment Guarantees
Low cost of financing (typically 1.0% to 2.0% annual commission vs 10%+ for debt loans)
Facility Architecture

Bank Guarantee (BG)

Structured specifically to avoid cash-flow bottlenecks and optimize borrowing costs.

Security Type:Counter-guarantee & cash margin (10-20%)
Tenor Horizon:1 to 5 years
Advisory Model:100% Conflict-Free
EXECUTION BLUEPRINT

How This Facility Operates

From initial diagnostic appraisal and credit memo preparation to multi-lender syndication and seamless disbursement.

01

Tender / Contract Document Appraisal

We review tender specifications, contract agreements, required guarantee verbiage, invocation conditions, and claim expiry periods.

02

Limit Allocation & Margin Negotiation

We allocate sanctioned non-fund BG limits and negotiate down cash margin FD requirements from 25%–30% down to 10%–15% based on overall collateral.

03

Draft Approval & Issuance

Issuing bank vets the standard BG format, verifies counter-guarantees, and issues the official stamped guarantee with SFMS confirmation to the beneficiary bank.

04

Release & Closure on Completion

Upon successful contract execution or defect liability expiry, the beneficiary returns the original BG deed, releasing the underlying fixed deposit margin.

CRITERIA & CHECKLIST

Eligibility & Documentation Checklist

Standard underwriting criteria across our network of 50+ scheduled commercial banks and institutional NBFCs.

Primary Eligibility Norms

BENCHMARKS
Audited Turnover:₹5 Cr+ annual turnover with proven contract execution capability
Business Vintage:Minimum 2 years in contracting, engineering, supply, or services
Promoter Bureau Score:680+ for primary directors and authorized signatories
Borrower Entity:Pvt Ltd, Public Ltd, LLP, Partnership, Sole Proprietorship
Assessment Mode:Cash Flow Normalization & Balance Sheet Strength
Advisory & Structuring Note:

Even if your financial ratios fall slightly outside conventional bank parameters, our credit advisory team structures mitigating covenants, secondary collateral, or multi-banking facilities to secure approvals.

Required Documentation Checklist

48-72 HRS

Keep these documents ready to fast-track your proposal review within 48 to 72 hours:

Notice Inviting Tender (NIT) or Letter of Award (LoA) with standard BG format
Audited financial statements and tax audit reports for past 3 years
Track record of completed project execution certificates
Details of existing funded and non-funded bank lines
QUANTITATIVE ADVISORY ENGINES

Calculate Limits & Financial Costs

Use our proprietary financial calculators to simulate borrowing capacity, drawing power, and debt service coverage before submitting to credit committees.

Interactive Calculator

Bank Guarantee Commission & Margin Calculator

Simulate facility parameters, cash flows, and interest outgo.

Launch Calculator
Interactive Calculator

Letter of Credit Cost & Sizing Calculator

Simulate facility parameters, cash flows, and interest outgo.

Launch Calculator
THE SME PAISA ADVANTAGE

Why Corporates Trust Our Structuring Desk

We do not lend from our own books. Our sole mandate is generating competing term sheets from 50+ banking partners to deliver lowest borrowing costs.

50+ Lending Partners

Direct access to credit committees across India's premier public sector, private commercial, and specialized NBFC lenders.

Multi-banking & consortium syndication
Rate benchmarking saving 75 to 150 bps
Fast-track credit appraisal & sanctions

100% Conflict-Free Pure Advisory

We do not lend from our balance sheet or operate with lender-biased volume targets or hidden commissions.

Unbiased institutional shortlisting for client benefit
Transparent advisory fees with zero hidden costs
Optimized debt profiles preventing debt traps

Government Scheme Maximisation

Integrating PLI, CGTMSE credit guarantees, TReDS, and Priority Sector lending benefits into your credit structure.

Collateral-free CGTMSE guarantee structuring
TReDS onboarding for instant invoice discounting
State capital subsidies and interest subvention

End-to-End Execution till Drawdown

Hands-on management from initial financial diagnostic through to term sheet sanction, security creation, and fund disbursement.

Institutional Credit Memo & CMA preparation
Direct negotiation of covenants & pricing
Dedicated corporate finance specialist assigned
FREQUENTLY ASKED QUESTIONS

Questions About Bank Guarantee (BG)

Key operational, structural, and regulatory details for this credit facility.

A Performance Guarantee (PBG) assures compensation if the contractor fails to deliver the promised goods or contractual milestones. A Financial Guarantee assures fulfillment of monetary obligations (such as security deposits, customs duty deferral, or mobilization advance return).
Advisory Mandate

Structure your Bank Guarantee (BG) with optimal pricing.

Speak directly with our debt syndication team to structure your facility across our 50+ banking partners.

Ready to Access the Right Funding Solution for Your MSME?

Share your business details - our advisory team will map the right capital structure and connect you with the right partners, fast.

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