Bank Guarantee

What is a Bank Guarantee?

A bank guarantee is a promise in writing to a third party, often a supplier or landlord, guaranteeing that a payment will be made on your behalf, by Heritage, when requested on demand. Only the beneficiary can demand the payment – the face value of the guarantee.

Establishing a bank guarantee requires security in the form of cash in deposit with Heritage, or property of a type and value deemed acceptable to the bank.

If you establish a cash secured bank guarantee, your money will be held in a term deposit as security and earn interest as per published rates. Property secured guarantees do not earn any interest. 

Benefits

  • Earn interest on the cash you use as security for the guarantee (if applicable).
  • Option to have one overall limit approved securing multiple guarantees (property secured guarantees only).
  • Can be issued with or without an expiry date. The beneficiary will notify you if an expiry date is required.
What are they used for?

In most cases bank guarantees are used:

  • To secure a tenants or lessees obligations to a landlord under a lease agreement;
  • For building contracts;
  • For payment of future accounts to a third party.
How much can be guaranteed?

There is no minimum or maximum amount, however:

  • Cash secured guarantees over $100,000 for must be assessed and approved by Heritage before we issue the guarantee;
  • Property secured guarantees for existing customers will be assessed in accordance with Heritage Bank’s standard lending criteria and are handled by our business banking team.  
Fees

Cash Secured
Establishment Fee  Nil
Annual Fee* 2.00% per annum or a minimum of $200 (whichever is greater)

Property Secured
Establishment Fees Available upon application#
Annual Fee*  2.50% per annum or a minimum of $200 (whichever is greater)

*Annual Fee payable annually in advance (first payment due before the bank guarantee is formally issued). Calculated on the face value of the bank guarantee and charged to your nominated Heritage Bank account.

Establishment Fees include and may not be limited to application fee, Land Titles Office registration fees, Title Search fees and Valuation fees and will be advised upon application and confirmed in the letter of offer.

Apply

Cash Secured

For cash secured guarantees visit your local branch or talk to us on 13 14 22

Property Secured 

For property secured guarantees ask for our Business Banking team on 13 14 22

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