Frequently Asked Questions
NEH FAQ’s
At NEH Guarantees, we are dedicated to providing exceptional premiums tailored to your needs for a more secure future.
NEH Guarantees
Construction Guarantees – Frequently Asked Questions
A construction guarantee is a formal assurance that the contractor will complete the project according to agreed specifications, timelines, and quality standards. It often includes financial backing to protect the client if obligations aren’t met
It protects the client from financial loss due to delays, defects, or non-performance. It also demonstrates the contractor’s credibility and commitment to quality.
A LOI/Letter of Intent is normally issued on behalf of the contractor to the employer stating that the Guarantor/Insurer has the intent to issue the Performance Guarantee or relevant insurances on behalf of the contractor once it has been awarded the contract as mentioned in the letter of intent.
The Letter of Intent contains the following details:
– Contractor Name and details
– Employer Name and details
– Description of the works that will be done
– Tender/Bid number
Guarantees can be issued by the contractor directly or through a third-party institution such as a bank or insurance company.
Facilities are typically finalized within 24 hours of submission.
You can expect your NEH Guarantee to be issued within an hour of submission.
It depends on the vetting process . Facility 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 been awarded 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 rate. The cost would be R500,000 X 2%/12X11 = R9,166.63 paid upfront and once-off.
Payment terms are available, subject to applicable terms and conditions.
Start Your Guaranteed Future Today
Request your free quote today and move forward with confidence.