Blenheim Advance Payment Guarantee
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Advance Payment Guarantee (APG)

Advance Payment Guarantee provides a contractor with an “interest free loan” which is repayable before the completion of the works.

The employer advances a certain amount of money to the contractor for work to be completed. The advance payment can be used to purchase plant, machinery and/or materials in cash for a particular project. This advance payment guarantee generally reduces and is set off against payment certificates.

Obtaining an advance payment guarantee within the initial phases of the contract where the greatest strain is placed on a contractor’s cash flow will provide the contractor with much needed working capital at the start of the contract when it is needed most.

Why choose Blenheim for your advance payment guarantees?

  • Specific expertise in raising advance payment guarantees from leading insurers which are approved by all employers in South Africa.
  • FREE Professional Advice for all your construction guarantee queries by an experienced and knowledgeable team.
  • FREE Letter of Intents to ensure you are always one step ahead in your tender applications.
  • All draft and original guarantees issued within 24 – 48 hours*
  • Immediate Guarantee Exposure reports generated via our tailored made software for your convenience.
  • Dedicated account manager assigned to you, to ensure a personalised service.
  • Timely and hassle-free collateral reimbursements.
  • No annual fees.

A quote takes between 24 – 48 hours to finalise, subject to all information being received.

It depends on the strength of your financial statements. Premium can be between 1 to 3.5% ex vat paid upfront, pro-rata, per annum. The minimum invoice period is for 6 months.

Here is an example and is for illustration purposes only. Let’s assume you have won a R5,000,000 project requiring a 10% performance guarantee of R500,000 for 11 months. We will further assume that you qualify for 2% ex vat premium. The cost would be R500,000*2%/12*11 = R9,166.63 paid upfront and once-off.

It depends on the strength of your financial statements. Collateral can be anywhere between 0 – 10% of the guarantee value. The average in the market is 10%. On successful cancellation of the guarantee your collateral will be reimbursed with any interest accrued.

Blenheim has specific expertise in raising insurance-backed guarantees from leading insurers. The insurers with whom we deal are reputable and accredited with all employers in South Africa including all municipalities, ESKOM Ltd, Transnet SOC Ltd and blue-chip listed entities.

A quotation usually takes 24 – 48 hours to finalise, subject to all information being received and, with all the correct documentation completed and information submitted, the facility can be put in place within four to seven working days.

With the facility in place, a guarantee is issued within 24 to 48 hours. Your facility can then be used for all your future guarantees up to a prescribed facility limit and multiple guarantees can be issued.

Remember we can still issue a letter of intent and draft guarantee during the setup of your guarantee facility. Provided sufficient documentation has been received.

Banks normally take 100% collateral and still charge fees to have a guarantee facility in place. Our insurers offer lower collateral requirements and you pay only for the guarantees you require. There are no annual fees for having a facility in place via Blenheim.

A guarantee facility separate from the bank will enable your company to grow since your financing can be handled by the bank and we do your guarantees.

Advance Payments are normally between 15 and 20% of the contract amount. There are only a few insurers in South Africa willing to issue a stand-alone Advance Payment Guarantee without a performance / construction guarantee being in place prior to the issuing of an Advance Payment Guarantee. At Blenheim we have the expertise, experience and the relevant insurers on our panel to assist you.



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Blenheim are proud Gold Sponsors to the Master Builders Association (MBA) East Cape. The MBA East Cape and Allied Industries Association has served its members and the building industry for over 100 years.