Surety bonds are a three way obligation between the Contractor, the Principal / Beneficiary and the Surety who has the responsibility to secure the obligations of the Contractor.
Surety bonds are a perfect alternative to secured bank guarantees. These bonds have similar wording to a bank guarantee, following the Australian Standards AS2124 which is an unconditional and on-demand undertaking.
They also carry the same obligations at law as a bank guarantee.
Unlike banks, the majority of times surety providers do not require security over your company’s assets and do not require the bonds to be supported by cash or other collateral. This allows you to free up funds, reduce debt and tender for additional contracts. Surety bonds can also represent a cheaper alternative to bank guarantees with lower base rates and no utilisation or line fees (in the majority of cases).
Surety bonds are designed for;
General builders
Mining
Civil, heavy and specialist engineering firms
Manufacturing
The types of contract and commercial bonds;
Performance bonds
Maintenance bonds
Off-site materials bonds
Retention bonds
Bid bonds
Advance payment bonds
C.I.B Trade Credit & Surety utilise the services of leading Australian underwriters when applying for a Surety Bond facility.
