Surety bonds
Guarantees without tying up your cash.
When a client or a public authority requires a guarantee, the bank provides it by using up your credit line. A surety bond does the same job without touching that line: the insurer guarantees performance and your cash remains available for what matters.
- Bank facility
- Untouched
- Public sector
- Accepted
- Issuance
- Within days
The tender
From tender specifications to performance bond, without using up your bank facility.
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The tender specifications
The contracting authority sets out in the specifications the guarantees required from bidders and from the successful bidder.
Ley 9/2017 de Contratos del Sector Público (Public Sector Contracts Act)
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Bid bond
When the tender specifications require it, it accompanies the bid. It can be provided through a surety bond issued by an authorised insurer.
Issued by an authorised insurer
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Performance bond
Provided by the successful bidder to guarantee performance of the contract, with the same validity as a bank guarantee or a cash deposit.
Lodged with the contracting authority
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Your bank facility
With a surety bond, the guarantee does not use up your credit line: the insurer guarantees performance and your cash remains available.
Without using bank credit lines
Ley 9/2017 de Contratos del Sector Público (Public Sector Contracts Act), article 108
Accepted by public authorities.
The law allows guarantees for public contracts to be provided through a surety insurance contract with an authorised insurer.
It is as valid as a bank guarantee or a cash deposit.
- Provisional and final guarantees
- Issued by an authorised insurer
- Lodged with the contracting authority
Bank guarantee or surety insurance.
Your bank credit facility
The bank guarantee uses up part of the facility and may tie up cash.The facility stays untouched and your cash remains available.
| Item | Bank guarantee | Surety insurance |
|---|---|---|
| Uses up bank credit lines | Yes | No |
| Guarantee for public authorities | Accepted | Accepted |
| Cost | Fee and sometimes a deposit | Premium on the guaranteed amount |
| Cash tied up | Possible | No |
| Issuance | Depends on the bank | Fast once the facility is approved |
How to obtain a surety facility.
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Information
Financial statements and forecast guarantee needs.
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Assessment
The insurer assesses the company's financial standing.
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Facility
A maximum available amount is approved.
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Issuance
Each guarantee is issued quickly against the facility.
Types of guarantee.
- Technical guarantees for public authorities
- Bid and performance bonds
- Advance payment and retention bonds
- Development and construction bonds
- Without using bank credit lines
- Fast processing and issuance
Frequently asked questions.
How does it differ from a bank guarantee?
It does not use up your credit line. A bank counts the guarantee as exposure; the insurer leaves your bank financing untouched.
Do public authorities accept it?
Yes, surety insurance is accepted in public procurement on the same terms as a bank guarantee.
How long does it take to issue?
Once the risk rating is in place, within a few days. The first step is the assessment of your company, which we handle for you.
Ask us for a surety facility for your next tender.
A business adviser will call you during office hours.