Factoring
Finance Insurance Bonds
Factoring Finance Insurance Bonds
Insurance
Bonds are increasingly being used by businesses to free up
their assets and unlock working capital.
There
are a number of different types of bond available.
The
most commonly used are detailed below:
An
Advance Payment Guarantee Bond is given as security for money
advanced at the beginning of a contract as a deposit, or on
account of goods and services to be supplied.
A
Bid Bond is a guarantee of up to 5% contract value to ensure
a successful tenderer is bound by the bid - can be called
if bidder fails to proceed having been awarded the contract.
A
Construction Bond is given in support of performance on major
contracts.
A
Performance Bond is a performance surety bond of up to 20%
of a contract value to cover against contractual default.
Deferred
Payment Bonds are used in connection with property purchase,
or in an MBO where part of the purchase cost is deferred for
an agreed period of time.
VAT/
Duty Deferment Bonds are issued in favour of HM Customs &
Excise to guarantee payment of VAT and duty.
A
Road and Sewer Bond is issued to local councils to secure
statutory obligations for the completion of relative work.
A
Retentions Bond is given in lieu of employer making deductions
or retentions from stage payments under a contract. The bond
is given in exchange for cash which otherwise would be held
back for a warranty period.
For
further information on Factoring Finance Insurance Bonds visit
the Factoring Finance website.
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