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 must be assessed and approved by Heritage before the guarantee is issued.
  • Property secured guarantees for existing customers will be assessed in accordance with Heritage's standard lending criteria and are handled by our business banking team.  
Fees

Fees differ based on the type of security provided for the guarantee. Annual fees are payable in advance annually and are automatically debited from your nominated Heritage Bank account.

Cash Secured
Establishment Fee  Nil
Annual Fee 2% of the guarantee amount or $200, whichever is greater.  First payment due before the guarantee is issued.

Property Secured
Establishment Fees To be calculated and advised on application and confirmed in letter of offer.  Fees may include: Application fee, Land Titles Office registration fees, Title Search fees and Valuation fees.
Annual Fee  2.5% of the guarantee amount or $200, whichever is greater. First payment due before the guarantee is issued.
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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