$40M Cash Unlocked for Australian SMEs through Proptech Platform
Australian businesses are embracing a new proptech solution that has helped them unlock more than $40m in working capital which would otherwise be tied up in bank guarantees for commercial leases.
eGuarantee offers lease bonds as a cost-effective alternative to bank guarantees and is now issuing a lease bond almost every week.
“A big gripe for Australian businesses is having to lock up capital in a deposit to get a bank to provide a guarantee for landlords,” says e-Guarantee CEO Shaun Sergay.
“In the current economic climate where cash flow is becoming increasingly hard for businesses to maintain, this is an additional burden,” he says.
Almost $10bill is currently tied up in bank guarantees, with eGuarantee having already successfully unlocked $40mill of that for businesses since it began offering digital lease bonds in 2021.
“Landlords typically require a term deposit of nine to twelve months rent as security which then becomes inaccessible for the business to use,” explains Mr Sergay.
“One of the disadvantages of using a bank guarantee is that it ties up working capital and may also impact on their ability to borrow.”
“Tenants using e-Guarantee pay a small percentage (2.5-5.5%) of the bond value as an annual fee and it’s also fast - the average lease bond takes just 48 hours to approve.”
“For commercial landlords it helps them to attract and retain tenants and because the entire process is digital it’s easier to track and safer from fraud,” says Mr Sergay.
eGuarantee is already accepted by 46 leading landlords including Dexus, Centuria Capital and EG Funds.
Dexus Head of Leasing and Workplace Chris Hynes says, "we pride ourselves on being at the forefront of innovation and adaptable to market needs. We see the benefits of lease bonds in place of a traditional bank guarantee, allowing our customers to utilise the capital they have to reinvest in their business growth with no risk to us as the landlord."
eGuarantee has gained an A+ rating for their lease bond solution from HDI Global Specialty SE, a S&P A+ rated insurer.
Real life examples of how eGuarantee works -
Sydney Cycling Shop
A cycling supply store was only able to provide a 3 month bank guarantee on a new lease however the landlord required 6 months.
Through eGuarantee they were able to provide the longer term security and continue to access their working capital.
Bond Term: 5 years
Fees: $5,977 p.a.
Bond Value/Cash Unlocked: $111,000 which they used to purchase extra stock.
Sydney Accounting Firm
A mid-size accounting firm with a 5 year lease worth more than $1.5M.
Bond Term: + 5 years
Fees: $11,120.63 p.a.
Bond Value/Cash Unlocked: $238,000 which they used to upgrade to a larger office with a premium fit out.
About eGuarantee
eGuarantee is a pioneering proptech company disrupting the commercial real estate industry with its innovative lease bond solutions. Founded by property industry veteran Cedric Fuchs and business transformation expert Shaun Sergay, eGuarantee offers businesses a secure, cost-effective alternative to traditional bank-issued guarantees. With a commitment to excellence and innovation, eGuarantee is reshaping the future of commercial leasing across Australia. eGuarantee’s lease bond solution is issued by Assetinsure – Australia and New Zealand’s largest provider of surety bonds – as agent on behalf of an international A+ S&P rated insurer HDI Global Speciality SE.
