What is a Bank Guarantee?

A bank guarantee is a facility offered by financial institutions as a sort of promissory note.

The bank is essentially providing a guarantee for a certain amount if the debtor fails to meet their obligations.

A bank guarantee will have an end date and a maximum amount that it covers, the end date can be in line with a lease, for example, it will end when the lease expires or on a nominated date.

In most cases, you will need to provide the bank with security with cash or property.