Advance/stage payment bonds

Advance payment bonds are widely used in all types of industries but are particularly prevalent in the engineering, manufacturing and construction sectors. They provide a guarantee to the customer that monies provided in advance of the goods or services will be reimbursed in the event of contractor default.

In common with other forms of bonds, this type of guarantee is usually best provided by a surety company rather than a bank, as it can usually be provided on an unsecured basis as it does not restrict working capital and in addition, more equitable bond wordings can be arranged.

Applicant/risk

  • Construction companies
  • Engineering companies.

Beneficiary

  • Local authorities
  • Government bodies
  • Commercial companies.