Performance Guarantee

What is Performance Guarantee?

Government procurement contracts would also require the submission of Bank Guarantee which amounts to 5% of the contract value. Without any existing banking facility, the standard requirement is 1:1 FDs for any issuance of the required Bank Guarantee.

Securing a bank facility for Letter of Credit is never easy. Even if a company is able to secure a facility, the terms can be unsettling. Banks would require an upfront security deposit of up to 40% for the guarantee.

Under government procurement contracts, performance bonds are issued under three categories: 

  1. Bank Guarantee
  2. Insurance Guarantee
  3. Financial Institutions Guarantee

As a financial institution approved and accredited by the Ministry of Finance and e-Perolehan, IFSB can issue performance guarantees

What You Need to Know

  • One of the requirements for government procurement contracts is a performance guarantee, at 2.5% to 5% of the contract value.
  • A performance guarantee is a requirement prior to commencement of contracts.
  • IFSB is an approved Syarikat Kewangan for issuance of Bon Perlaksanaan.
  • A commission fee of 0.4% is chargeable monthly during the validity period.

We also offer Advance Payment Guarantees – which work in a similar manner to Performance Guarantees except that the government is entitled to reclaim the advanced payment made if the contractor does not complete the job awarded.

We offer solutions tailored to meet your specific needs. Our rates are competitive with flexible terms, and initial approval process is fast. Our team of experienced and dedicated finance specialists can advise and provide you with access to the best funding solutions for your business.

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Application Process


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Receive written confirmation (Letter of Offer, Letter of Award, signed contract) from the government on award of project.



Prepare three (3) signed copies of Arahan Pembayaran. The document should be signed by a government officer.


Submit to IFSB

Compile the following documents and submit to IFSB.


Received Payment

IFSB will issue the Performance Guarantee to you within three working days*.

*Subject to completion of all documents submitted. Terms and conditions apply.

At IFSB, we work closely with you to arrange this alternative to bank facilities. Such guarantees are an indicator of our confidence in your business and at the same time, protecting yours and other project owners’ interest as well.

Registration Form

Fill up the form below to discuss any opportunities to work together.


Factoring financing is a great solution if you are seeking the financial stability that you need to improve your company’s cash flow.

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