Surety bonds

Provides protection when selling an asset for payment over an extended period. An example would be selling a business or property where payment will be made over a number of years.

Also referred to as HMRC bond or Movement Guarantee. Allows you to import, store, and distribute goods and delay payment of the custom and excise duty for an extended period, to relieve pressure on your cash flow.

A type of surety bond issued by an insurance company to ensure proper completion of (or the performance on) a project by a contractor. Contractors requiring a performance bond typically work in construction or service industries. The party issuing the contract will require the bond as protection in the event of failure or breach of contract by the contractor. It offers security that the contractor has the ability to comply with its obligations to fulfill the contract.

Issued in favour of an employer where they have agreed to waive their right to reduction of retention monies from sums owed to the contractor for work performed. The bond represents the retention percentage, which usually ranges between 3% and 5% of the contract price. Retention bonds can be a significant aid to cash flow releasing.

Also known as a Bid Bond. These are typically used in public works tenders and provide security that the contractor the work is awarded to will actually sign the contract and undertake to perform the work as contracted.

Also referred to as Advanced Payment Guarantee. Used in a number of industries including the Construction Industry. In the case of construction, the contractor may seek an advance payment prior to the project commencing in order to purchase high value plant or materials that are specifically required for the project. The client may call for an Advance Payment Bond to secure the payment against default by the contractor, for example if the contractor becomes insolvent. Typically, the amount of the bond equals the sum advanced.

Provides a solution to support legitimate financial transactions, other than the raising of capital, subject to suitable collateral support.

Gives security to a supplier that they will be paid for the goods or services that they supply on credit. This can be particularly useful where traditional Credit Insurance is not available.

Often requested by land owners, councils, governing authorities to ensure proper removal of the equipment and restoration of the environment to its pre-existing state. They are used for land fill waste operations, solar energy, wind turbines and quarrying, and may be a pre-requisite of planning permission by the Local Authority.

Also known as road or sewer bonds. The Section Agreement is put in place between the Developer and the Council or relative Water Authority to ensure the satisfactory completion prior to the adoption of a new road or sewer system on a development. The developer agrees to Bond or place cash collateral to the value of the road or sewer Works and covers that roadway or sewer until the end of the Making Good of Defects period. At which point the road or sewer should be adopted by the relevant authority, and the bond is released. Most common section bonds are Section 38 Road, Section 98 & 185 Water, Section 104 Sewer, and Section 278 Highways.

Required by HMRC for bonded warehouses where imported goods are retained until such time that the duty owed on the goods is paid. The size of the bond or guarantee relates to the potential duty due to HMRC on the warehouses average end of the month stock calculated over a 12-month period.