Bank Guarantee Release Letter first of these is a Direct Bank Guarantee. A direct bank guarantee is a guarantee which will result in payment directly to the beneficiary. The second type of bank guarantee is an Indirect Bank Guarantee. An indirect bank guarantee is payable not directly to the beneficiary, but to the beneficiary’s bank. This is rarely needed in sugar trading, as payment is usually made by a letter of credit, under which payment is only made to the seller in the event that the conditions of the contract are fulfilled.