Guarantee arrangement fee

When the guarantor is an institution, the granting of a guarantee entails the performance of administrative formalities necessary for its registration and formalisation. This is why, when granting a guarantee, institutions may charge an arrangement fee (for the guarantee) which is normally a percentage of the amount secured by the guarantee, with a minimum amount.

What requirements must your bank meet in order to charge this guarantee arrangement fee?

  • Remember that the fees charged by banks are unrestricted, except in the case of certain fees that are limited by law.
  • In the case of the guarantee arrangement fee, there is no limit, so each bank can establish the fee it chooses.
  • Also, in order for the bank to be able to charge this arrangement fee, it must be expressly stated in the guarantee contract signed by the parties, in which it must specify the fee amount and when it can be applied.
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