Bank Guarantee

A bank guarantee is written promise guaranteeing that a payment will be made by the Bank on your behalf. 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 G&C Mutual Bank, 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.

A Bank Guarantee is an undertaking by the Bank that payments to your customers and suppliers will be met, without tying up working capital.

• The Bank holds your cash or a registered mortgage as security for the guarantee
• You provide your supplier with the guarantee instead of cash
• If you cannot make payment, the Bank will meet your commitment
• You will need to repay any funds the Bank has paid on your behalf
• When there is no outstanding payment or debt, your security can be released

• Reduce your upfront costs – avoid paying the full amount of an upfront deposit in cash, by providing a Bank Guarantee instead
• Improve your cashflow – keep your cash to use for other purposes to run and grow your business
• Secure your Bank Guarantee with a range of assets
• 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

In most cases bank guarantees are used:

• To secure a lease, project or property
• Your third party is known as a Favouree and usually provides goods, services or real estate to you
• The reason for your Bank Guarantee is called a Purpose - each Bank Guarantee must have one

You'll secure your Bank Guarantee with cash, residential or commercial property