Fuel Guarantee

Benefits to the retailer

Due to the nature of the fuel business and the high cost of holding stock, cash flow is one of the keys to the success of your business.

The business needs to generate enough revenue to meet daily, weekly and monthly expenses, and at the same time maintain stock levels to ensure uninterrupted trading in accordance with the fuel companies’ requirements. The retailer therefore needs sufficient working capital to meet the demands of large fuel and supply payments.

The retailer will typically either take out a large loan or apply for an adequate overdraft facility. The need for a bank guarantee or cash deposit held by the Oil Company is over and above these requirements and drain further cashflow from the business.

Without a guarantee, the retailer effectively trades on a ‘hard cash’ basis. Revenue needs to be in the account prior to payment for fuel, and delivery is only scheduled subsequent to payment. This working capital required is costly.

In the event of a bank guarantee being issued, the retailer can enjoy the benefits of receiving fuel on consignment however the bank guarantee can be costly to the retailer.

With the introduction of the Garagesure insurance product, the fuel guarantee alleviates the need for a cash on demand guarantee and allows the service station owner to utilise his or her capital where it is best required – in the business!

Having more capital in the business can improve the cash flows further and reduce any loan risks or trading risks. The strong backing of our insurer (AA- ZA by GCR) means that our guarantee is accepted by most Oil Majors.


Approved by

  • BP Southern Africa

  • Puma Energy

  • Sasol Oil

  • Total South Africa

  • E10 Fuels

  • Caltex Branded Marketers (North & South)


Cost

  • Annualised cost in a corridor of between 2.5% and 6.5% of the value of the guarantee at risk.

  • Price depends on the quality of risk and site performance and whether or not short-term insurance is placed with Garagesure as well

  • Premium payable on a monthly basis (or annually) in advance, upon inception of the guarantee

  • The premium is a tax deductible expense to the business

  • VAT can be claimed back, further increasing the net saving to retailer


What we need from you

Please visit the “forms” tab, the following application forms will be required to be completed:

  • Fuel Guarantee Application form

  • Acknowledgement form

  • Surety details form

  • Consent to do credit check form

Existing Retailers

  1. Copy of valid Commercial insurance policy

  2. Copy of most recent audited / reviewed financial statements and last 3 months’ management accounts

  3. Last 6 months’ bank statements

  4. Proof of past 6 months’ fuel turnover (litres)

  5. Written trade reference from oil company confirming that fuel account is in good standing

  6. Valid Tax Clearance Certificate

  7. Copy of CIPC Company Registration document

  8. List of personal assets & liabilities for all listed directors/members

  9. Proof of residential address (all listed directors/members)

  10. Proof of business address

  11. Copies of ID documents for each listed director / member and if married in community of property, please provide a copy of the spouse’s ID

New Retailers

  1. Twelve ((12) month’s projections

  2. Business Plan

  3. Copy of CIPC Company Registration document

  4. List of personal assets & liabilities for all listed directors/members

  5. Proof of residential address (all listed directors/members)

  6. Proof of business address

  7. Copies of ID documents for each listed director / member and if married in community of property, please provide a copy of the spouse’s ID


Broker Network

Brokers are essential in spreading the product into the market and therefore we only make use of brokers as per our FSP license.

  • We refer direct approaches from potential clients to brokers of our choice in that specific region

  • Brokers earn a commission

  • We have a well established broker network in place but are always looking to expand this and therefore welcome any opportunities to discuss new business opportunities.