Case Study: $4.74M in Construction Guarantees Issued in Just 7 Days

Introduction

In large-scale infrastructure projects, construction companies often need to provide financial guarantees to demonstrate reliability and commitment. These guarantees help satisfy the employer’s risk management needs, especially when substantial prepayments or performance benchmarks are involved.

A client from Central Asia approached Trade Finance Company with the urgent requirement for both an Advance Payment Guarantee and a Performance Guarantee, aligned with a multimillion-dollar construction contract.

Time was critical: the project schedule demanded prompt issuance of the instruments to prevent delays in mobilization and execution.

Challenges

The client faced several key challenges:

• Dual Instrument Requirement: Both an Advance Payment Guarantee and a Performance Guarantee were required — each with specific wording and conditions tied to the contract.
• Tight Timelines: Delays in delivering the guarantees could jeopardize project timelines and funding disbursements.
• Strict Compliance Requirements: The wording of the guarantees had to meet employer standards and pass legal review, necessitating multiple revisions.

Solutions

To meet these demands, Trade Finance Company implemented a streamlined, collaborative, and compliant process:

• Customized Drafting & Negotiation: We worked closely with the client and their legal team to prepare and revise the guarantee drafts until final acceptance.
• Parallel Structuring: Both instruments were developed concurrently, ensuring no time was lost waiting for separate reviews.
• Speed & Accuracy: Once payment was confirmed, we prioritized execution and issuance to ensure both guarantees were delivered in just 7 days.

Solution Implementation

The process began with initial drafts provided by beneficiary banks, which kicked off a collaborative review and revision period. Between April 10 and May 20, 2025, multiple revised drafts of both the Advance Payment Guarantee and the Performance Guarantee were exchanged to ensure full alignment with the client’s contract terms and the employer’s requirements. On May 22, 2025, the signed drafts were received, followed by proof of the pre-issuance fee on May 23, with payment clearing into the account by May 27. The final documents were then sent for issuance on May 29, and by May 30, 2025, both relayed copies of the financial guarantees were successfully delivered to the client — completing the entire transaction within just 7 days from payment receipt.

Results

By the end of the 7-day execution period, the client had in hand:

• A $3,160,402.94 Advance Payment Guarantee

• A $1,580,201.47 Performance Guarantee

These results delivered immediate and long-term benefits:

• On-Time Project Mobilization: The guarantees enabled the client to unlock prepayment funds and start work without delay.
• Compliance and Trust: Employer requirements were fully met, ensuring continued trust and credibility.
• Efficient Execution: Trade Finance Company demonstrated agility and professionalism, handling both instruments simultaneously without compromise.

Discussion

This case demonstrates how well-coordinated financial structuring and expertise in trade instruments can make or break complex project timelines. Whether for public infrastructure or private development, guarantees like these serve as vital tools for securing trust, managing risk, and enabling project financing.

Trade Finance Company’s ability to issue two large instruments under tight deadlines showcases our commitment to helping clients deliver results — even under pressure.

Conclusion

The successful delivery of over $4.74 million in construction guarantees in just 7 days reinforces Trade Finance Company’s position as a trusted partner for businesses engaged in high-value contracts.