February 7, 2023
eGuarantee’s commercial Lease Bonds: easier, faster & cheaper
eGuarantee’s commercial Lease Bond is an easier, faster, cheaper, and more secure way for commercial tenants and landlords to provide and accept lease security.
Similar to residential leases, commercial landlords will generally require a tenant to provide ‘security’ at the start of their lease, which is often six to twelve months’ rent. This is used to ensure that the tenant’s obligations under the lease are met, with the security bond being paid to the landlord should the tenant fail to comply with the terms and conditions of the contract.
While bank guarantees and cash security deposits have long been the status quo for providing lease security on commercial property, eGuarantee’s lease bond solution is a newer, better alternative, offering a number of benefits over these outdated methods.
What is a commercial Lease Bond?
A commercial Lease Bond is a three-party contract, whereby a third party guarantor provides an unconditional undertaking to pay the landlord the total value of the lease security in the event that the tenant defaults, or does not ‘make good’ the commercial premises at the end of the retail lease.
eGuarantee’s commercial Lease Bond
As the first of its kind to be offered to the Australian and New Zealand market, eGuarantee’s lease bond solution allows commercial tenants and landlords to enjoy superior financial and administrative benefits with all the protection and legal credibility of a traditional bank guarantee.
eGuarantee’s lease bond solution is an unconditional and irrevocable financial guarantee backed by a consortium of the world’s largest global reinsurers, allowing for on-demand security payment in line with the terms of the lease.
- Save money: eGuarantee’s lease bond solution is 100% free for landlords to offer and use
- Stand out in the market: by cutting out the large upfront cost associated with a traditional lease security and replacing this with a smaller annual fee, eGuarantee’s lease bond solution encourages both tenant attraction and tenant retention.
- Enhanced security: as a completely digitised form of lease security, eGuarantee’s lease bond solution allows you to avoid the unwanted exposure of outdated paper authentication. Have peace of mind knowing that your lease securities are held on a secure, encrypted platform.
- More convenient: being an end-to-end digital solution, eGuarantee’s lease bond solution allows you to do away with the administrative hassle and stress of keeping track of paper bank guarantees. Manage claims and cancellations instantly through a globally accessible online system.
- Total Transparency: with eGuarantee you can digitise your entire bank guarantee portfolio and integrate it with Lease Management software through an open API for real-time viewing of your lease security
- Automated processes: receive advance notice of your lease expiry date, as well as automatic upstamping of lease bond value with rent escalation.
- Guaranteed payment: rest assured that even if your tenant enters administration or liquidation, your claim will be unaffected as the lease security is provided by a thirty party insurer.
- Streamlined processes:
- Communicate seamlessly with tenants, guarantors and intermediaries (agents, tenant representatives and brokers) via eGuarantee’s digital platform
- Correctly identify parties through automated naming conventions as per ASIC records
- Correctly identify properties through automated addressing conventions as per the Australia Post database
- Increase productivity by permitting platform access for your solicitors and asset managers
- Share your records and lease agreements with your custodians and trusts
- Streamlined property transfer: save yourself the administrative burden with a customised template of the terms and conditions of your leases, allowing you to effortlessly transfer eGuarantee’s lease bond solution electronically when your property is sold or acquired.
- Better tenant-landlord relationships: start your lease agreement on good terms with an eGuarantee lease bond solution that provides financial relief for your tenants, saving them from having to put up precious collateral or pay large upfront costs.
- Avoid large upfront costs: For new tenants, eGuarantee’s lease bond solution enables you to avoid putting down six to twelve months’ rent at the start of your tenancy. Instead, you only have to pay a small annual service fee in smoothed instalment payments.
- Improve Your Financial Circumstances: Tenants who switch to eGuarantee mid-lease term will immediately have their initial cash bond or bank guarantee security handed back to them for an instant boost in working capital.
- Build your business: Rather than locking up your security in a bank account as ‘dead money’, an eGuarantee lease bond solution allows you to invest back into your business operations, upgrades, people or growth with the six to twelve months’ rent you’ve just freed up as working capital.
- Get accepted fast: With eGuarantee, tenants can be approved in as little as 48 hours with no cash or collateral required.
- Stand out in the market: Gain a competitive advantage in the lease application process by having your documentation ready for fast processing to secure your chosen property.
- Enhanced security: As a completely digitised form of lease security, eGuarantee’s lease bond solution allows you to avoid the unwanted exposure of outdated paper authentication. Have peace of mind knowing that your lease security is held on a secure, encrypted platform.
- More convenient: Being an end-to-end digital solution, eGuarantee’s lease bond solution allows you to do away with the administrative hassle and stress of bank applications and landlord negotiations with a simple electronic application and credit process.
- Total transparency: Access real-time lease guarantee details 24×7.
- Automated processes: Receive automated reminders prior to lease expiry.
- Streamlined processes: Communicate seamlessly with your landlord, managing queries and changes instantly via an online dashboard.
- Better tenant-landlord relationships: Start your lease agreement on great terms with an eGuarantee lease bond solution that gives your landlord total assurance of payment through a trusted third party underwriter.
Why choose eGuarantee?
1. Underwritten by the best
All eGuarantee lease bonds are administered by Australia’s largest surety underwriter, Assetinsure, on behalf of some of the world’s largest reinsurers, all with AA/A – S&P ratings.
2. Secure your commercial lease faster
On average, eGuarantee provides lease bonds three times faster than traditional bank guarantees.
3. Growing industry adoption
Most of Australia’s largest commercial landlords are already onboard, with Dexus, Investa, Charter Hall, Centuria, Mulpha, EG Funds, Aliro and many more business partners already using eGuarantee’s lease bond solution.
4. Tailored to the market
With bonding facilities available for $20,000 up to $15 million (before accommodation), eGuarantee lease bonds are a suitable option for most tenants and a number of startups in the market for a commercial lease.
5. Support every step of the way
eGuarantee provides helpful guidance for tenants as they complete the application process, engaging them directly to provide the necessary security.