NAB Bank Guarantee: Broker Application Checks

A NAB bank guarantee gives a landlord or contract counterparty a bank-backed payment promise. To arrange one for your client, match the commercial obligation to the guarantee wording, choose the security and take the application through a NAB Business Banker.

The client still carries the cost and payment exposure. Prepare the release arrangements at the same time as the application, so the guarantee doesn’t remain outstanding after the business obligation ends.

Match the Guarantee to the Obligation

Start with the lease or contract and identify who needs to provide security to whom. As at October 2026, NAB’s bank-guarantee product covers business premises and contractual performance for businesses or individuals.

Record the applicant’s legal name and the beneficiary’s legal name. The beneficiary is the party entitled to call on the guarantee. Keep a trading name separate from the legal entity that signs the contract.

Put the following details in the client file before requesting a draft:

• The signed contract or proposed lease, including its guarantee clause.
• The amount and currency the beneficiary requires.
• The obligation being secured and the premises or contract reference.
• The required expiry date, or the requirement for no expiry.
• The conditions for returning or releasing the guarantee.

Ask the client’s legal adviser to interpret conflicting contract terms. For example, a lease ending on 30 June and a guarantee expiring on 30 September create different dates to manage. Resolve the intended coverage with the beneficiary before issue.

A bank-issued guarantee differs from a person promising to repay another borrower’s debt. Use the business-loan guarantor guide for that separate file requirement.

Choose the Security Route

Choose cash or asset security by looking at what the client can commit for the guarantee’s life. As at October 2026, NAB lists a term deposit, residential or commercial property and other acceptable security, subject to approval.

Its faster cash-backed route covers guarantees up to $1 million with 100% cash security. Cash security therefore ties up money even though the beneficiary receives a guarantee instead of a deposit.

Prepare evidence that lets the banker assess the proposed route. This is a preparation list to agree with the banker, rather than a fixed NAB document checklist.

Assessment question	Evidence to prepare
Who is applying and who can sign?	Identification, entity details and signing authority documents
Where does cash security come from?	Account statements showing the funds and their ownership
Who owns proposed property security?	Property details, ownership records and existing debt statements
Can the client carry fees and a payment demand?	Financial statements, current debts and a cash-flow forecast
What creates the obligation?	Lease or contract with the guarantee clause

For property security, identify existing mortgages before discussing available equity. Have the banker confirm the security assessment and any required valuation. A property value alone doesn’t establish that NAB will accept it.

Keep this business-guarantee assessment separate from NAB residential mortgage policy. Residential property can secure a business obligation without making the guarantee a home loan.

Check Fees and Ongoing Exposure

Calculate NAB bank guarantee fees using the security route and the period the guarantee remains outstanding. NAB’s business fee guide effective 1 September 2026 sets these charges for cash-backed guarantees up to $1 million under its Bank Guarantee Application and Facility Agreement.

The issuing fee is 1% of face value each time a guarantee is issued, with a minimum of $125. The service fee is 2.3% per annum of face value, charged half-yearly in arrears. A minimum service fee of $125 applies each half-year per outstanding guarantee.

For other bank guarantees, issuing and service fees are available on application.

The current online fee schedule has the same guarantee charges. Obtain the client’s route-specific fee confirmation before quoting a total. Include any separate security or legal costs in the estimate.

For a hypothetical $50,000 eligible cash-backed guarantee outstanding for two complete six-month periods, the issue fee is $500. Each six-month service charge is $575. The combined issue and service estimate is $1,650, excluding other costs and any later reissue.

A cash-backed guarantee also commits $50,000 as security in that example. Keep that amount separate from fees when explaining the cash requirement.

NAB warns that it can pay a beneficiary’s demand without consulting the applicant, debit the applicant’s account or break the securing term deposit. A dispute with the beneficiary therefore needs prompt legal attention. Budget for payment exposure as well as recurring charges.

Prepare the Application and Wording

Give the NAB Business Banker a reconciled instruction pack and ask for the NAB draft bank guarantee before issue. As at October 2026, NAB’s public application process runs through a banker, who starts the application and issues the guarantee.

Use the banker-supplied application and facility agreement for the chosen route. Compare the draft with the contract and the beneficiary’s requirements before the client authorises issue.

1. Match the applicant and beneficiary legal names to the contract and entity documents.
2. Match the guarantee amount, currency and obligation description to the guarantee clause.
3. Reconcile the expiry date and any extension requirement with the commercial timetable.
4. Have the legal adviser review demand wording and any conditions affecting payment.
5. Agree the return or release process with the beneficiary and record who holds the original.
6. Obtain the banker’s confirmation of accepted wording, security arrangements, fees and issue instructions.

Keep beneficiary acceptance of the draft in the file. If the beneficiary asks for different wording, send the change to the banker and legal adviser before issue. Don’t edit the issued instrument yourself.

Record the named banker, the expected issue date and how the client will receive the original. That gives you a clear escalation route if the guarantee is needed before lease commencement or a contractual deadline.

Track Issue and Release

Check the issued guarantee against the accepted draft before the client delivers it. Compare the legal names, amount, obligation reference and expiry. Retain a copy and record delivery to the beneficiary.

As at October 2026, NAB says a guarantee without expiry continues until it is returned, authenticated and cancelled. Ending the underlying contract alone doesn’t close it.

NAB’s cancellation request form, marked February 2025, requires the original guarantee for cancellation by mail. Send the completed coversheet with the original by registered mail or Express Post to NAB Bank Guarantee team, Level 30, 395 Bourke Street, Melbourne VIC 3000.

The form says processing is usually within three business days after receipt. It also provides for a pro-rated final service fee under the facility terms. Keep tracking evidence until NAB confirms cancellation to the customer.

If the original is lost, use the banker’s recovery instructions instead of mailing a copy. Agree who obtains the beneficiary’s release and who follows up with NAB.

Distinguish cancelling this guarantee from closing the whole guarantee facility. The cancellation form asks whether the customer wants the facility cancelled or expects further guarantees. Give the banker the client’s instruction and obtain written confirmation of the final fees and security release arrangements.

Close the broker’s task when the client has cancellation confirmation and knows what happens to the securing funds or property. Keep any outstanding release action assigned to a named person with a follow-up date.