Surety Bonds

Surety bonds: flexible access to capital

Surety bonds provide an alternative to bank guarantees or letters of credit and can be used to enhance the liquidity of your business.

They are a useful tool for businesses pursuing expansion or increasing scope of operations, freeing up bank lines for working capital and possible acquisition financing by providing unconditional and on demand access to funds.

Benefits include

  • a bona fide alternative to bank guarantees and retention monies
  • improved liquidity and cash flow
  • used and recognised in major trading countries worldwide
  • supports and enhances your own credit management
  • opens up new business opportunities through the transfer of risk
  • assets are not tied up as security.

How surety bonds work

A surety bond is a three-way obligation between

  • the principal (you)
  • the surety or guarantor (Gallagher)
  • and the obligee (governmental or corporate entity) seeking financial assurance

that provides recourse for the organisation issuing a contract if the terms of the agreement are not met.

Surety bonds can be used for assurance in contracts or projects, terms of commercial licences or permits and to guarantee payments.

There are two types of surety bond available

  1. Contract bonds secure performance and contract related obligations without the need to provide financial or collateral based security.
  2. Commercial bonds cover other types of bond that fall outside the scope of contract bonds.

A Gallagher surety bonds specialist can help you choose which type of bond works best for your business requirements and what sums it should cover.

Have questions about surety bonds? Let's talk.

Call +61 8 6228 1142 to speak to a member of our Trade Credit and Surety team. Alternatively complete the form opposite and we'll get in touch at your preferred time.

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