A Surety bond is a contract of guarantee consisting of three parties:
– Contractor
– Surety (Bond issuer)
– Principal (beneficiary).
Under the bond, the Surety commits to being responsible for the non-performance of the Contractor, up to the specified amount. If the Contractor defaults on their obligations, the Principal can claim their losses, within the bond's limit, from the Surety according to the bond's terms. Acting as a guarantor, the Surety will compensate the Principal for their losses up to the bond amount and then seek reimbursement from the Contractor for the payment made.
Benefits of Surety Bonds
- Bonds are a widely accepted form of contract security (an alternative to bank guarantee) and are accepted by the private sector, federal, state and local municipalities.
- Are flexible and operate alongside traditional banking facilities.
- No tangible security or collateral required, thereby freeing up assets for other purposes, i.e. growth of the business or procurement of additional working capital
- Bond Facilities allows Contractors to free up funds and reduce debt and tender for more contracts without being restricted by security requirements.
- Bond Facilities allow for greater financial flexibility by allowing the company to leverage its capital base and therefore utilise assets more cost effectively.
- Provides the company funding flexibility / options by not having to utilise its banking lines.
Bond Resorts Surety Contract Bonds
Contract Bonds provide protection against contract non-performance or default. They are an industry recognised, genuine alternative to bank guarantees and allow the contractor to manage their capital more efficiently. Contract Bonds offered by Bond Resorts Surety include:
- Retention Release: Provides security to the beneficiary when the contractor is advanced funds from the retention fund.
- Off Site Material: Secures the Obligee where payment to the contractor for items to be constructed or held off site has occurred but delivery of the goods has not taken place. The bond responds if the goods or materials are not available when required for use in the contract – with the bonds reducing when goods or materials are fixed to the site.
- Bid/Tender: Supports a contractor’s bid or tender to ensure that they will enter into a contract if accepted.
- Performance Bonds: Provides security to the Obligee against the contractors non-performance or default during the contracted period.
- Maintenance Bonds: Secures the contractor’s obligations during the warranty or latent defects period.
- Advance Payment: Secures the Obiligee’s position on funds advanced to the contractor for capital purchases or site preparation (in advance of works being completed).
Surety Bond Application Process
Bond Resorts Surety works with clients to understand their business in a timely manner. Successful applicants will be able to evidence:
- A track record of financial strength and stability
- Technical ability to deliver on all contractual requirements
- Risk management processes, controls and culture
- Evidence of professional financial and operational management
- Financial considerations include:
- Minimum revenue of $50 Million per annum
- Minimum net tangible worth of $5 Million
- Appropriate leverage metrics (i.e. understanding potential exposures from existing/future debt facilities)
- Positive cash flow
- Positive working capital
- At least 3 years of continuous profitabilit
About Bond Resorts Surety
Bond Resorts Surety is a specialist provider of Surety Bond solutions in United State. Bond Resorts Surety was established in 2005 to be a leader in the provision of Surety Bond solutions to Clients across industries including general construction, infrastructure, telecommunications, engineering, mining and oil & gas in United State.
Surety Bonds are an industry recognised, genuine alternative to bank guarantees and allow the contractor to manage their capital more efficiently.
Bond Resorts Surety is a subsidiary of Bond Resorts, a specialist provider of construction insurance solutions across United State.
Contact Bond Resorts Surety
300 South 4th Street, Las Vegas, NV 89101
T 702-758-8498
E info@bondresorts.com
© 2023 Bond Resorts Pty Ltd License No: NV20051126014
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