Bank guarantees for business customers

Why choose Westpac

Support from a dedicated team of bank guarantee specialists
Competitive fees
Easy application process

What is a bank guarantee?

It is a written promise on your behalf that a financial institution like Westpac will make a future payment to the beneficiary if they make a claim on the bank guarantee. With a bank guarantee, you don’t need to pay an upfront deposit to the beneficiary for things like a rental or retention bond.

Benefits

Earn interest on cash security

Your cash security grows in value because it’s held as a term deposit

Flexible terms

Choose an amount from $5,000 with an expiry date that aligns with your needs

Dedicated support team

Save time with a specialist service team that will guide you through the end-to-end application process

Rates and fees

Fees for cash-secured bank guarantees up to $250,000

Service fee
2.50% p.a with expiry dates of up to 5 years ($200 p.a. minimum)^#	3.00% p.a. with expiry dates longer than 5 years or with no expiry ($240 p.a. minimum)^#
Service fees are charged half-yearly in advance.
Establishment fee
$250 for cash-secured bank guarantees^# Contact us about fees for bank guarantees over $250,000 secured using cash or other assets.

Eligibility criteria

You and the beneficiary must be a tax resident of Australia and are one of the following:

A business
A government entity
An individual
A not-for-profit organisation

The bank guarantee must be:

used for business purposes
issued in Australian dollars

How to apply

1. Have the following details handy:

- Beneficiary’s legal name or if it’s a business, the beneficiary’s ABN or ACN

- Beneficiary’s address (no PO boxes)

- Bank guarantee purpose

- Amount ($5,000 minimum)

- Expiry date

Note that you’ll be required to open a term deposit to secure your bank guarantee. If you’re a new Westpac customer, you’ll need to visit a branch to verify your identity before applying.

2. Contact us to discuss your requirements.

3. Collect your bank guarantee from a branch (bank guarantees can only be issued in paper form).

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Need more information?

Get the details on how bank guarantees work.

Find out more

Frequently asked questions

What information is required to explain the purpose of a bank guarantee?

Bank guarantees can only be used for business purposes. The purpose should specify what the bank guarantee is for. Examples include:

Security deposit bond: A deposit or bond for contractual obligations related to the business e.g. Suite 1, Level 1, ABC street, Sydney NSW 2000
Lease/rental bond: A rental bond for a commercial lease e.g. Lot 1 Unit 1, ABC St, Sydney NSW 2000
Contract performance guarantee: A bond to a business supplier for the delivery of goods or services e.g. Project Terex Valley Subcontract no. WQX114
Retention bond: Retentions being withheld under construction contracts e.g. retention for construction works at A04 utility room project SOW-C884.

How long does it take to issue a bank guarantee?

What’s the difference between a bank guarantee with an expiry date and one without an expiry date?

The expiry of a bank guarantee is typically aligned with the date when your contractual obligations to the beneficiary finishes. Once the bank guarantee expires, you’ll no longer be charged a service fee and the beneficiary can’t make a claim on the bank guarantee. There may be circumstances where you may prefer to have an expiry date that exceeds the contract end date. For example, some people may add an extra 3 to 6 months to the expiry date of bank guarantees for commercial leases to cater for business uncertainties. You can also extend the expiry date in future if your contract extends beyond the original date.

For a bank guarantee that doesn’t expire, you’ll continue to pay the service fee and your security can’t be released unless the original bank guarantee is returned to us for cancellation. Additionally, a bank guarantee with no expiry could allow the beneficiary to make a claim after your contract ends. If this happens, we’ll be required to use your security to pay the beneficiary.

Who can make a claim on a bank guarantee?

Only a beneficiary can make a claim. To do so, they must visit a branch and submit:

the original bank guarantee, which will be exchanged for a bank cheque
written instructions with the following information:
- claim amount and whether it relates to a partial or full claim
- signature of the authorised representative
- business or government entity’s letterhead, address, contact number and email address, or individual’s name, address, contact number and email address
- details required to receive the payment in the form of a bank cheque, including:
  - the beneficiary’s name or entity (as stated in the bank guarantee) that the cheque is payable to
  - the branch where the cheque will be collected
  - name and contact details of the person collecting the cheque. A photo ID is needed upon collection.

If the original bank guarantee is lost or misplaced, the beneficiary must contact us to discuss the next steps.

Can a bank guarantee be cancelled?

Things you should know

Credit criteria, fees, charges, terms and conditions apply. Talk to your banker for more details.

^#Quoted fees are only applicable to cash-secured bank guarantees up to $250,000. Subject to Westpac’s normal lending criteria. Contact us for more information.

Bank Guarantee