Performance Bonds are established by contractors for the benefit of their clients or potential clients and provide security against default or non-performance and are an alternative to bank guarantees. They provide third party financial protection, generally without encumbering assets or established credit lines and include;
- Bid Bonds
- Performance Bonds
- Advance Payment Bonds
- Retention Release Bonds
- Maintenance Bonds
- Off-Site Material Bonds
The guidelines for eligibility are:
- Minimum company turnover of $30 million per annum and;
- Balance Sheet Net Tangible Assets of at least $4 million dollars.
- Dollar for dollar, cover in terms of net tangible worth versus bond facility size. i.e.:
- Details of the ownership structure and financials for the company group /
- trusts involved with the applicant.
- Owner / Shareholder guarantees are mandatory with facilities for privately owned
- entities of this size and nature.
- Positive cash flow, working capital and retention of profits within the business.
Peformance Bonds can offer significant assistance to companies looking to undertake major developments.