This is a non-commercial document that is often used in business correspondence. The essence of the paper is that the sender undertakes to perform some action. In our case, transfer money to the contractor. These funds are usually either used to pay off debt.
A letter of guarantee for payment of services under the contract confirms the existence of a debt, which can be taken into account when considering a dispute in court.
Thanks to such paper, the parties to the transaction can build a trusting relationship, postpone the payment date without fines and penalties, and prevent delays in the delivery of goods (provision of services, performance of work).
When might this paper be needed and how to write a letter of guarantee for payment? As a rule, it is drawn up in the case when the customer cannot transfer money on time for one reason or another. And the reason for drawing up such a document may be the payer or the latter’s own initiative.
How to apply
An approved sample of a guaranteed letter of payment for services or goods is not provided for by current legislation. However, it is part of business document flow, so when preparing it it is worth considering several generally accepted rules.
Let's consider the mandatory provisions that should also be in it:
- Date and originating number.
- Details of the recipient of the money (company name or citizen’s name, address).
- FULL NAME. representative of the recipient (for example, the head of the organization).
- Document title (optional).
- The main text, which guarantees the transfer of the required amount within a specific period.
- Details of the document on the basis of which funds will be transferred (invoice, acceptance certificate, etc.).
- Sender information.
- Full name, position and signatures of the debtor's representatives.
Typically, the paper is drawn up on an A4 sheet on company letterhead, signed by managers (general director and chief accountant) and sealed.
Such a document must be signed not only by the general director, but also by a financially responsible person (for example, the chief accountant or financial director).
In the main text, among other things, you can briefly indicate the reasons for late payments. If the customer plans to pay off the debt in installments, then a schedule should be drawn up.
For greater persuasiveness, the payer can also prescribe the amount that will be charged to him for each day of delay.
Example of a payment guarantee letter
What mistakes are made when compiling
Since we are dealing with such paper as, for example, a sample letter of guarantee for payment, it would be inappropriate to use informal words (slang, vernacular) here. It is also not worth describing in detail the events that led to the impossibility of transferring money on time. You can indicate their very essence or omit this point altogether. Warranty obligations must be written down accurately, indicating the amount and date of its transfer.
All information in the text must be clear for understanding (without ambiguous phrases) in order to prevent possible disputes.
Finally, it is advisable to receive notification from the lender that the document has been received. This will prevent paperwork from being lost along the way.
A letter of guarantee for payment is a document in which one of the parties to the transaction confirms its intention to pay (in the near future) for the goods or services received. Simply put, such a letter is a way of securing financial obligations. Not the most reliable, but popular and quite effective.
When should I write?
The most common scenario: an entrepreneur urgently needs to purchase a new batch of goods or use some service, but his financial situation does not allow him to pay immediately. It doesn’t matter - you can ask your counterparty for a deferment. If he agrees, the businessman will simply write a letter of guarantee for him. This is a common practice in cases where both parties have been cooperating successfully for a long time (and, accordingly, are confident in each other’s integrity).
Very often, a letter of guarantee becomes a response to a letter of claim. Let's say you ordered a product or service from a seller (performer), but there were problems with payment. Naturally, the seller will send you a claim demanding payment as quickly as possible. Unpleasant situation. But what if you can’t give away the money right now? That's right, write a letter of guarantee. Even if your counterparty prefers real money to any messages, he will probably be satisfied with this letter at first (and at least will not immediately go to court).
Decor
The law does not clearly say how to write a letter of guarantee about payment, and there is no special form for such messages. If the guarantee is drawn up on behalf of a legal entity, then it must be written on company letterhead. In this case, in addition to his signature, the manager will also have to put a seal. But individual entrepreneurs (and individuals, that is, ordinary citizens) can draw up this document on a regular sheet of paper.
The list of required details looks like this:
- the number of the outgoing letter and the date of its composition;
- information about the sender (company name, full name of the entrepreneur);
- information about the recipient - the name of the organization (full, not abbreviated) and the full name of its director, for whom the guarantee is intended;
- title – here you can simply indicate the subject of the message; the title “Letter of Guarantee” is usually not written.
Instead of writing the sender's information manually, you can put a company stamp (if you have one).
What to write in the text?
The text of the letter usually consists of four short parts:
- first, the entrepreneur indicates what financial obligations he undertakes to fulfill;
- followed by a mention of the period during which he plans to do this (specific or approximate);
- Bank details are required - the account number from which the payment will be made;
- finally, penalties are mentioned in case of violation of the obligations assumed by the entrepreneur (this clause is not mandatory; it is not always included in the text of the guarantee).
The following template wording and introductory phrases can be used in the text:
- We guarantee;
- By this letter we guarantee;
- The company LLC "So-and-so" guarantees;
- We guarantee timely payment in full;
- We hereby guarantee.
An important point: if you are the head of a company (that is, a full-fledged legal entity), then it is advisable that the letter of guarantee is also signed by your chief accountant. If you are an individual entrepreneur, then put only your signature.
When preparing and writing a letter of guarantee for payment, consider several recommendations.
- Write the text in simple, clear, concise phrases. The simpler the document is written, the better - this way it is guaranteed that there will not be any unclear provisions that can be ambiguous.
- If you have to write letters of guarantee often, create a unified template for yourself so that you don’t have to rewrite the message from scratch every time.
- If desired, the letter of guarantee can be drawn up in more detail than was indicated in the above diagram. No one forbids you to write down as specifically as possible exactly which days you are going to pay, at what time intervals, why, etc. But do not overdo it - the text should fit on one sheet.
- Always indicate your current account. The recipient must know “where” exactly the payment is coming from.
- You can additionally attach various documents to the letter if required by the counterparty. This could be a Certificate of state registration of your company (or individual entrepreneur), an extract from the Unified State Register of Legal Entities, an order for the appointment of a general director, etc. You do not need to attach any of this on your own initiative.
It is worth saying more about the clause about liability for failure to meet payment deadlines. In essence, letters of guarantee are promissory notes. Accordingly, they should indicate liability for non-payment and delay (at least in theory). For this purpose, indicate in a separate line the procedure for calculating “penalty” interest for each day of delay.
However, this clause is not always used. Sometimes a manager forgets about it unintentionally (it is not mandatory), sometimes intentionally (because no one wants to voluntarily increase the burden of their responsibility). It happens that the other party believes in the integrity of the entrepreneur and does not want to overshadow the cooperation by scrupulously prescribing interest, fines and other “usurious chips”. You need to understand two things:
- even if this is not stated separately, it is possible to collect interest on late payments (according to Article 395 of the Civil Code);
- but you won’t be able to get much - the fine is limited to 0.3 percent for one day of delay.
In addition, without a clause on the procedure for calculating penalties, even this 0.3 percent cannot be simply obtained - the other party will have to go to court and take a long time to prove that this case falls under the provision of additional payment for the use of someone else's money.
In a word, if you do not write, but receive a letter of guarantee about payment, immediately prepare a sample for the counterparty, which will include a clause on debt collection (see sample below). If you are composing the letter yourself, try to delicately omit this part. This is not entirely correct from a business point of view, but why do you need unnecessary (albeit unlikely) problems?
Compilation example
A classic letter of guarantee looks something like this (we provide only the text, without details):
“We ask you to send us the next batch of products in accordance with application No. 1753 dated July 20, 2015.
By this letter we guarantee that payment in the amount of 30,000 (thirty thousand) rubles will be made by us before September 1, 2015.
In case of non-payment in the prescribed amount within the prescribed period, this letter of guarantee should be considered as confirmation of the fact that our company has received a commercial loan for the amount of products supplied. In this case, for each day of late payment, an additional amount of 1% of the amount of overdue obligations will be charged.
Our bank details:
OJSC AKB Uralsib, St. Petersburg.
r/s No. such and such.”
Download a sample payment guarantee letter.
As you can see, everything is quite simple. The most important issue is related to the delay, and now you know how best to solve it. And remember - a letter of guarantee does not create one hundred percent legal guarantees of fulfillment of obligations. This is just an analogue of an IOU, nothing more.
A letter of guarantee is a document in which one party (legal entity, individual entrepreneur) guarantees the other to fulfill certain obligations within a specified time frame.
Download sample letters of guarantee:
Letter of guarantee for work completion
A letter of guarantee for the completion of work is a business correspondence document containing a promise by a legal entity or individual (group of persons) to complete certain work by a specific deadline (or deadlines, if the work is carried out and delivered in stages).
Letter of guarantee for debt repayment
A letter of guarantee for payment of debt is drawn up when the buyer does not have time to pay for the ordered or already received goods and, using a business correspondence document, officially promises the supplier to repay the debt within a certain period of time.
Letter of guarantee for employment
A letter of guarantee for employment is a business correspondence document that contains a promise from the employing organization to get a job.
Payment guarantee letter
A letter of guarantee for payment is a business correspondence document that contains a promise by one person (legal or individual) to pay for goods, services or work to another person (individual or legal).
Letter of guarantee for provision of a legal address
A letter of guarantee for the provision of a legal address is a business correspondence document containing the landlord’s consent to provide the tenant with the address of his premises as a legal address for the latter to register his organization with the Federal Tax Service.
Letter of guarantee for delivery of goods
A letter of guarantee for the supply of goods is a business correspondence document containing a request for the delivery, as agreed, of a certain product within a specific time frame.
Application of a letter of guarantee
A letter of guarantee is part of business correspondence between enterprises and serves as an additional guarantee of cooperation and fulfillment of obligations.
Although this document does not have official legal status, its content and design, in the event of litigation, can affect the course of the case.
Try the program for Business.Ru stores, which will allow you to create templates for letters of guarantee. And also automate accounting and tax reporting, always be aware of all mutual settlements with employees, control cash flows in the company, and a personal calendar will promptly remind you of important events.
Most often, companies (or their managers) guarantee their partners, by contacting a legal entity or manager, payment for ordered work or services, delivered goods, repayment of debt, payment in case of deferred payment.
Often a letter of guarantee is drawn up in response to a claim. It is written in a purely business style, without complex speech structures and unnecessary reasoning.
Letter of guarantee for payment (sample) why the document is needed, how to draw it up correctly, samples of writing a letter of guarantee for payment of debt and performance of work
What is a letter of guarantee, how to write it correctly, samples of writing a letter of guarantee. A letter of guarantee is a document that confirms the intentions of one party to perform certain actions in favor of the other party or, as an example, the intention to adhere to any conditions in relation to the other party. A competently written letter of guarantee is the key to your confidence in its execution.
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Letter of guarantee - what is it?
Payment guarantee letter (sample)- this is, first of all, a document containing a guarantee of the implementation of the obligations assumed by one party in relation to the other. Such obligations may be the provision of any services, performance of various types of work, payment of debt, and so on.
The most common type of letter of guarantee is a letter of guarantee for payment of debt.
A correctly drawn up document is a guarantee of its implementation
In order for the letter of guarantee to be drawn up competently and correctly, you should adhere to the following recommendations:
- Appropriate writing style – when writing a letter, you need to adhere to a business style, because a letter of guarantee is, first of all, a document.
- Expediency and brevity - you should not write too much; it will be enough to briefly and concisely state what is needed.
- Specificity - exclude words that carry uncertainty; it is worth formulating sentences clearly, using words such as, for example, we guarantee, we undertake.
- Certainty and clarity - the text of the letter of guarantee should be clear and simple.
- Spelling and punctuation errors in the letter are unacceptable.
Letters of guarantee on behalf of a legal entity must always contain the necessary details and the signature of the manager.
Mandatory details for a legal entity:
- Name of the organization and its details
- Required contact details
- The essence of the appeal in the letter
- date of signing
- Seal of the organization, as well as the signature of the responsible person
Details for individuals:
- Passport details and residential address
- The essence of the appeal in the letter
- Signature
Document preparation
Since the law does not clearly provide for a form for writing a letter of guarantee for payment of debt, confirmation of the completion of services and work, about employment and other types of this letter, writing it is quite simple.
When writing a letter of guarantee, it is worth considering only that if the letter is drawn up on behalf of, it must be drawn up on the letterhead of a legal entity and contain the necessary details. From an individual, a letter of guarantee can be written in any written form.
Samples of writing guarantee documents
Letter of guarantee for payment of debt (the document must be drawn up on the organization’s letterhead, must be signed by the chief accountant, as well as the manager, and must be affixed with a company seal).
Nowadays, in the modern business world, business relationships based on commodity-money exchange are built between partners (organizations, individual entrepreneurs, individuals). To streamline these relationships, there is business correspondence; one of these forms is letters of guarantee.
At its core, a letter of guarantee is a document confirming the fulfillment in the future of undertaken obligations, such as: payment of debt, performance of work, provision of services, delivery of goods, etc. The debtor can write a letter of guarantee in which he assures of the speedy payment of the existing debts within a certain period of time.
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The guarantee is often used in claims (pre-trial) dispute resolution procedures. When a debt has arisen and there are grounds for filing a claim in court, but with the help of guarantee obligations, a so-called deferment of payment occurs until a certain date. This instrument is enshrined in Articles 619, 715, 723, 480 of the Civil Code of the Russian Federation, which give the debtor an additional period to eliminate violations of the terms of the contract (for example, payment terms).
So in what cases is it worth drawing up a letter of guarantee? This issue is resolved by agreement of the parties. One of the parties has the right to demand that they provide a guarantee (for example, when the supply of goods is carried out on credit or not on an advance payment basis).
In most cases, guarantees are nevertheless drawn up in case of violation of the deadlines for fulfilling monetary obligations, when the defaulter, trying to avoid legal proceedings, sends this document to his creditor. Also, in frequent cases, the specified guarantee is written in response to a claim for debt repayment.
For example, the supplier sends a claim to the buyer demanding payment of the amount of debt for the delivered goods, indicating that the debtor did not fulfill his obligations within the time period specified in the contract.
The current Russian legislation does not provide for generally mandatory requirements for the preparation and essence of a letter of guarantee, however, they are of a legal nature.
However, every business person should be able to compose these letters correctly and skillfully.
This article is intended to consider the features and rules for drawing up (executing) a guarantee for debt payment.
Primary requirements
When drawing up this guarantee, you need to approach the drafting of its text with full responsibility and seriousness. Its content should be clear and understandable, the language should be businesslike, without slang and jargon expressions. When indicating the time frame during which obligations will be repaid, you must be aware of your financial capabilities. Indeed, if the guarantee is not fulfilled, you may incur losses in the form of legal costs, penalties, and fines.
The text of the letters of guarantee must necessarily contain the following details:
- Name of the organization, full name of the sender.
- Sender's details (TIN, KPP).
- Legal and actual address of the sender.
- Name of the organization, full name of the person to whom it is addressed - the recipient of the letter.
- Indication of the type of circumstances or statement of the entire essence of the guarantees provided to the addressee, deadlines for fulfillment, amount of debt (indicated in words and figures), debt repayment schedule, number and date of the agreement under which the debt arose.
- Official seal of the sending company. In the event that the writer of the letter does not have a seal (an individual or individual entrepreneur), only his signature is sufficient.
- Signature of management and chief accountant.
- Date of document creation.
When writing a letter, the wording “letter of guarantee” should not fundamentally appear in the text.
It would also be useful (and besides, it will inspire confidence on the part of the creditor) if the letter indicates penalties for failure to fulfill obligations within the agreed period.
What wording to use when preparing a letter of guarantee
In order to formulate the essence of the assurance as correctly as possible, you need to know what wording will most clearly reflect it.
The most suitable words and expressions would be:
- We guarantee.
- We undertake to pay the amount of debt.
- We confirm payment on time.
- Please send to our address by cash on delivery ( type of guarantee).
- We guarantee timely payment.
- We hereby give a guarantee.
Sample applications
Sample letter of guarantee for payment of debt
LETTER OF GUARANTEE
By this letter we undertake to repay, by June 15, 2016, the existing debt under the contract for the supply of non-food products No. 132/TK dated January 20, 2016 for payment for the goods supplied in the amount of 123,466 (one hundred twenty-three thousand four hundred sixty-six) rubles, taking into account VAT. Payment will be made in equal monthly installments:
- until April 15, 2016 – RUB 41,155.
- until May 14, 2016 – RUB 41,155.
- until June 15, 2016 – RUB 41,156.
General Director __________________ /A.N. Ivanov/
Sample No. 2
LETTER ON DEBT PAYMENT
Due to the difficult financial situation at the enterprise due to a delay in financing from the customer, your organization currently has an unforeseen debt under subcontract agreement No. 567/2015 dated November 17, 2015 in the amount of 670,000 (six hundred seventy thousand) rubles. In turn, we guarantee that the debt will be repaid in full by December 30, 2016.
In case of failure to pay on time, interest will be paid at the rate of 1% of the amount of overdue obligations for each day of delay.
Director _______________V. L. Sobolev
Chief accountant _______________I. V. Pisareva
Sample No. 3
On May 10, 2014, a lease agreement for non-residential premises No. 678-56 was concluded between our organization and you. Indeed, according to the reconciliation report dated June 30, 2015, our organization incurred arrears in paying rent and utilities for June and July 2015 in the amount of 60,000 rubles. In turn, we apologize for the improper fulfillment of our obligations (due to the blocking of the current account by the tax service) and guarantee to repay all outstanding debt in full by September 30, 2015. We also guarantee not to violate the terms of the agreement concluded between us in the future.
Director ______________/V.I. Ivanov/
