A Surety Bond is very similar to a bank guarantee with the exception that it’s underwritten by an insurance company.

The advantages of a Surety Bond facility can be easily demonstrated using the following example:

A contractor with a net worth of $2 million wins a contract for $20 million and is required to lodge a bond for $2 million ( i.e. 10% of the contract value). Traditionally, a financial institution would require the contractor to either place at least $2 million on deposit or effect a mortgage/debenture over assets of similar value.

Surety Bonds are generally unsecured, allowing you greater flexibility to release funds/assets otherwise tied up under a bank guarantee.

At RMS Credit, we specialise in Performance Bonds and Petroleum Bonds and can assist you in finding a solution to your enquiry.