Stening Simpson Surety Bonds make construction more profitable.
ONE OFF SURETY BONDS/BANK GUARANTEES
We now have available to us, an “A” rated Underwriter who will consider providing security under a contract for one off Bonds with no requirement of, first, establishing a Surety Bond Facility.
Apart from good financials and a proven track record, the main criteria is that net tangible assets of the company be at least double the amount of the security required.
The current list of accepted beneficiaries are :
State and Federal Entities
The list of beneficiaries will be expanded over time.
The Underwriter is also able to consider Bank Fronted Guarantees should a Surety Bond not be acceptable to a Beneficiary.
UNPRECEDENTED $20M TURNOVER SURETY BOND FACILITY
Previously in the Australian Surety Market, Underwriters would only consider companies with turnover in excess of $30m (realistically $50m) with net assets of $5m.
We now have available to us, an “A” rated Underwriter who will consider companies with turnover of $20m. This is unprecedented in Australia.
This means that the smaller quality companies and sub-contractors will now be considered for a Surety Bond Facility, providing the same benefits as the larger companies are currently enjoying.
If you meet the following criteria or you know of a company that meets the criteria, do not hesitate to contact us:
• Revenue of at least $20 Million per annum (an average of $20 Million over a 3 year period);
• Must have a minimum net tangible worth of $1 Million;
• Positive cash flow;
• Positive working capital;
• At least 3 years of continuous profitability;
• Operating for at least 5 years.
The Underwriter is also able to provide Bank Fronted Guarantees (within the Surety Bond Facility) should a Surety Bond not be acceptable to a Principal, which allows the Surety Bond Facility to be deployed more efficiently.
Benefits of Surety Bonds/Surety Bond Facilities
- Bonds are widely accepted form of contract security and accepted by the private sector, federal, state and local municipalities.
- Are flexible and operate alongside traditional banking facilities.
- Bond Facilities are unsecured (no tangible security or collateral is required).
- Bond Facilities allows Contractors to free up funds and reduce debt and tender for more contracts without being restricted by security requirements.
- Bonds are an alternative to bank guarantees.
- Bond Facilities allows the company greater financial flexibility by allowing the company to leverage of its capital base and therefore utilise assets more cost effectively.
- There is no upfront or establishment fees or ongoing fees payable, apart from legal documentation costs on establishment of Facility. Premiums on Bonds are only payable on usage.
- There is quick turnaround in issuing Bonds to meet contract deadlines.
- Provides the company funding flexibility / options by not having to utilise its banking lines.