Why Do Businesses Opt for Bank Guarantees During Peak Trading Seasons?

Boosting Financial Credibility to Meet Peak Season Demand

Beverages, dairy, food, pharmaceuticals, cosmetics, and construction materials are among the industries experiencing a significant surge in consumption during the year-end period. Order volumes and transaction values can double or even triple compared to regular days. To capitalize on this demand, many distributors are pre-ordering and stockpiling inventory while prices remain stable.

Mr. Nguyen Van Minh’s company in Ho Chi Minh City, a distributor for a beverage brand, is increasing its inventory in preparation for distribution in late 2025 and early 2026. To finance this inventory, distributors often rely on cash flow from sales to retailers or end consumers, creating substantial financial pressure during this period.

“To maintain our supply chain, we can’t wait for payments to come in. That’s why I opted for a bank guarantee, which allows us to commit to payments to manufacturers and receive goods immediately without needing a loan.” This bank-backed commitment strengthens the distributor’s credibility, helping Mr. Minh’s company secure favorable prices from manufacturers and maintain relationships with retailers at all levels.

Mr. Minh’s situation is not unique. Mr. Le Hoang Nam, director of a household appliance distribution company in Dong Nai, shares: “Starting in October, our order volume nearly doubled, but capital was tied up with retailers. We used ACB’s payment guarantee with manufacturers. This ensures both parties can collaborate confidently without waiting for cash.”

In another sector, guarantees are essential for construction contractors bidding on large projects or stockpiling materials from suppliers, especially as they prepare for spring projects. Payment for completed projects can take years, yet cash flow must remain fluid to fund new ventures.

“Most construction companies opt for bank guarantees to optimize capital efficiency without increasing direct debt or collateral. With a solid business plan and a reliable bank partner, creditworthiness is strengthened. We focus on our expertise while the bank handles financial assurances,” says Mr. Nguyen Thanh Binh, an accountant for a construction contractor in Binh Duong, who has used ACB guarantees for four consecutive years.

Bank guarantees enhance a company’s financial credibility, enabling them to secure goods, sign contracts, or receive advances for large transactions. This is particularly beneficial for SMEs, allowing them to partner with larger entities, retail chains, or manufacturers that typically require proof of financial capability. For larger enterprises, guarantees provide flexibility in cash flow management, making them a preferred alternative to direct loans.

ACB Guarantees – Your Reliable Partner in Business Commitments

ACB offers guarantee solutions to help businesses seize opportunities by building trust with partners and optimizing cash flow, especially during peak seasons.

ACB stands out by prioritizing customer convenience with streamlined procedures and quick issuance of guarantee letters, ensuring businesses can handle urgent contracts. Competitive fees and flexible collateral options enable companies to optimize capital without additional asset pledges, particularly for those with strong credit profiles.

ACB is a pioneer in digitizing the entire guarantee process, allowing customers to manage everything online through the ACB ONE BIZ app or website. Companies can initiate guarantees with just a few clicks, submit documents digitally, and track issuance in real time. Integrated financial management tools save time, reduce paperwork, and enhance accuracy.

According to an ACB representative, the bank’s goal is to support businesses not just with capital but with financial credibility. “Companies need capital to purchase inventory, but they also need trust to trade. Guarantees provide both,” the representative explains.

From a supplier’s perspective, guarantee letters are a “trust seal” in transactions. Ms. Tran Thu Hang, regional sales director for a packaging materials company, notes: “When customers present an ACB guarantee, we view it as a solid commitment. This speeds up delivery and payment, especially during peak seasons.”

During peak seasons, while goods move quickly, cash flow can stall. Businesses leveraging guarantees as a financial shield gain an advantage in maintaining supply chains, strengthening credibility, and accelerating year-end performance.

For more information on ACB’s guarantee solutions, visit here, contact the 24/7 Contact Center at (028) 38 247 247, or visit your nearest ACB branch for consultation and support.