understanding the benefits of surety bonds. what is surety bonding? surety obligeeprincipal
TRANSCRIPT
Understanding
The Benefits
Of Surety Bonds
Understanding
The Benefits
Of Surety Bonds
What is Surety Bonding?
Surety
ObligeePrincipal
Types of Surety Bonds
• Bid Bond
• Performance Bond
• Payment Bond
Types of Surety Bonds
• Bid Bond
• Performance Bond
• Payment Bond
Types of Surety Bonds
• Bid Bond
• Performance Bond
• Payment Bond
Benefits of Surety Bonds
• Provide capable & qualified contractors
• Assure project completion
• Offer financial security
• Technical, managerial, or financial assistance
Surety Bonds
Benefits of Surety Bonds
• Reduce risk of liens filed by subcontractors, laborers, & suppliers
• Protect taxpayer dollars• Smoother transition
from construction to permanent financing
• Lower costs
Surety Bonds
Surety Bonds vs. Letters of Credit
Surety Credit Bank Credit
Premium Interest
Expect reimbursement if loss
Repay loan
Principal benefit of surety credit
Borrower has benefit of bank $
Who Benefits
From A Surety Bond?
Primary Decision Makers
• Surety assures qualified contractor
• Surety provides expertise, experience, & assistance
• In event of contractor failure, surety handles & completes project
Private Owners
Primary Decision Makers
• Assures project will be built according to terms & conditions of the contract
• Lender can be dual obligee with direct rights under the bond
Bankers & Lenders
Primary Decision Makers
• Protects taxpayer dollars
• Assures that lowest bidder is capable of completing the project
• Necessary payment protection for subcontractors & suppliers
Public Owners
Influential Advisors
Architects/Engineers
SuretyBonds
Developers Lenders
Owner
Riskmanagers
Attorneys
Architects Engineers
CPAs Subs
Contractor
Surety Bonds
FinancialSecurity
ConstructionAssurance
For More Information
Surety Information Office1828 L St. NW, Suite 720
Washington, DC 20036
202-686-7463 | Fax 202-686-3656
www.sio.org | [email protected]