Bonds and Guarantees are required to underpin contractual performance on price, quality and timescale. These guarantees have historically been provided by a company’s own bankers, but have an adverse effect on a company’s banking lines affecting reducing working capital and frequently have to be totally cash covered.
Insurance surety companies can provide exactly the same guarantees without the need for cash cover leaving banking line free to run the business on a day to day basis.
Type of Bonds:
Construction Bid & Tender
Guarantee the tender price, quality and time scale will be adhered to.
Either Conditional or On Demand.
Conditional Bonds guarantee price, quality and time scale as laid out in the contract.
On Demand can be called on for any reason.
Can be offered so that the retention element can be released early. This needs to be negotiated along with the original contract.
VAT is payable as goods are imported into the country. A deferment guarantee allows it to be settled at month end but needs to be guaranteed by either a Bank or Surety.
When advanced payments are made for a machine or services the customers may ask for a guarantee stating that they will either get their machine of their money back on non-performance.
Spreads the cost of a purchase over a set period guarantee ensuring that no default will occur.
To learn more about our Bonds services, contact Umberto Oliva on 020 8282 8590.