What is a Bank Guarantee?
A Bank Guarantee is a form of ‘security’ and an alternative to providing a deposit or bond directly to a third party (known as a beneficiary).
A Bank Guarantee is a common business tool that gives your suppliers, vendors, or landlord certainty that they will be paid without tying up critical working capital. Your business also benefits from the interest earned on the cash security, which is paid to you monthly.
Bank Guarantees are commonly used for:
- lease or rental bond: a bond for a commerical lease like a shopfront, worksite, or office space
- contract performance guarantee: a bond to a supplier to assure the delivery of goods or services.
Benefits.
How it works.
- You provide Beyond Bank with a cash security. Want to use property for security instead? Reach out to your Business Banker for more information
- Your cash security will sit in a Bank Guarantee Facility Account, with the interest earned paid monthly to your Business Banking Transaction Account
- You provide your beneficiary with the Bank Guarantee instead of a traditional deposit or bond
- If you cannot make a payment to the beneficiary, Beyond Bank will meet the commitment up to the amount of the bank guarantee. To do this, the beneficiary needs to send the original Bank Guarantee along with a letter asking Beyond Bank to make the payment
- Once you have repaid any debts and the beneficiary has returned the Bank Guarantee to Beyond Bank along with a letter confirming payment, your security will be released.
Eligibility criteria.
You and the beneficiary must be a tax resident of Australia and one of the following:
- a business
- a government entity
- a not-for-profit organisation.
The Bank Guarantee must be:
- used for business purposes.
How to apply.
- Before you get started, make sure to have the following details handy:
- beneficiary’s legal name, ABN, or ACN
- beneficiary’s Australian address (no PO boxes)
- bank Guarantee purpose
- amount
- expiry date.
- Contact our Business Banking team by completing the online enquiry form or speaking with your local Business Banker.
What happens once my Bank Guarantee has been approved?
- Allow up to 10 business days for approval of your application, depending on the nature of security provided. Guarantees with a cash security are generally quicker than those secured by mortgage
- Once your application has been approved and we have received your chosen security (cash or property) for the Bank Guarantee, your Business Banker will contact you to issue the guarantee document.
Interest rates.
| Bank Guarantee Facility Account | Interest Rate (%p.a.)* |
| All amounts | 3.70% p.a. |
Fees and charges.
Fees that apply - Beyond Bank Direct
| Establishment fee | $550 |
| Ongoing fee | 1.40% p.a. (charged every 6 months) |
Fees that apply - Assuro
| Establishment fee | $550 (including GST) |
| Ongoing fee | 1.30% p.a. (charged every 6 months) |
Fees that apply - Guarantees funded before 23 January 2025
| Establishment fee | $375 |
| Ongoing fee | 1.00% p.a. (charged every 6 months) |
FAQs.
A Bank Guarantee is a promise given on behalf of a customer to cover a payment obligation to a beneficiary if they make a claim on the guarantee. It can be used for performance contracts, rental bonds, and lease agreements, among other things.
Bank Guarantees are available to Beyond Bank Business Banking customers such as sole traders, companies, government entities, and not-for-profit organisations.
Most commonly, you can secure a Bank Guarantee with cash held in a Bank Guarantee Facility Account, however you can also apply to use equity in residential or commercial property as security. Please speak with your Business Banker for more information about property used as security.
The core benefit of a Bank Guarantee is to give your nominated beneficiary assurance of payment. If you are unable to make a payment, the beneficiary can claim the dues, up to the amount of the Bank Guarantee, from Beyond Bank.
The other key benefit of choosing Beyond Bank for a Bank Guarantee is that interest accrued on your cash security is paid monthly rather than annually – helping you manage your cash flow.
Depending on the type of Bank Guarantee, you may choose not to set an expiration date for your guarantee. For more information, please speak to your Business Banker.
To cancel a Bank Guarantee, we need a letter from the beneficiary confirming you have fulfilled the commitment along with the original bank guarantee document.
The beneficiary will need to issue a written request to Beyond Bank along with the original Bank Guarantee document advising us that the commitment is not fulfilled and that they want the bank to make the payment. We will advise the beneficiary of our process to release funds and will make the payment within 5 business days.
Please read this important information.
| ^ | Account holders may be covered by the Commonwealth Government's Financial Claims Scheme (FCS). Under the FCS, deposits are protected up to a limit of $250,000 for each account holder at each bank, building society and credit union (also known as authorised deposit-taking institutions or ADIs) that is incorporated in Australia and authorised by APRA. Payments under the FCS are subject to a limit for each depositor. See the FCS website for more information at https://www.fcs.gov.au. |
| ^^ | Funds used to secure the Bank Guarantee cannot be accessed during the term of the Guarantee and will only be released to the owner when cancelled or expired and not renewed. |
| * | Variable rates current as at 23 January 2025 and subject to change. Interest is calculated daily and paid monthly. Variable rates are subject to change throughout the life of the bank guarantee which means the amount of interest earned is also subject to change. |
| When you acquire a cash-backed Bank Guarantee, you will be required to open a Bank Guarantee Facility Account and a Business Banking Transaction Account. Terms, conditions, fees and charges apply. All applications for a Bank Guarantee are subject to Beyond Bank assessment. | |
| This information has been provided without taking into account your objectives, financial situation or needs. This information must not be relied upon as financial advice. Before acquiring a Bank Guarantee, you should read our Financial Services Guide, Product Guide, Fees and Charges Guide and Target Market Determinations. These are available on our website at beyondbank.com.au/about-us/corporate-governance/disclosures, by calling us on 13 25 85 to request a copy or by visiting a branch. They will also be provided at the time of acquiring the product. | |
| All products and services are provided by Beyond Bank Australia Ltd, 100 Waymouth Street, Adelaide, SA 5000, ABN 15 087 651 143 AFSL/Australian Credit License 237856. © 2025 |