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Surety Bond from an Insurance Company

The issuance of Surety Bonds by insurance companies creates a competitive advantage.

What are the Benefits?

In an era where enhancing liquidity for businesses is a critical factor for growth and resilience, the issuance of Surety Bonds by Insurance Companies provides a competitive edge and ensures:

Fast Assessment and Issuance Process

The specialization of Insurance Companies in the field of surety insurance, coupled with their different operational structures compared to banks, ensures high speed and efficiency.

No mandatory Commitment of assets and cash

Each case is examined individually. The assessment primarily focuses on the risk associated with the Surety Bond (during its validity period), combined with the value of the collateral, rather than the ability to repay loans.

More Effective Financial Management - No Impact on the Balance Sheet with Liabilities

Obtaining Surety Bonds from Insurance Companies is not registered as an obligation and does not affect the capital structure or the related financial ratios that are crucial for securing financing.

Competitive Cost

The cost of an insurance Surety Bond pertains to the premiums during its validity period. It is competitive compared to similar fees from banks and is normally recorded as an expense for the business.

Increased Liquidity

The insurance Surety Bond is an effective liquidity management tool. It does not impact bank loan limits, thus increasing available funding. Additionally, many businesses that have already exhausted their credit lines can free up part of their existing bank limits and secure additional funding for working capital and new investment opportunities.

Reduced cost of Project/Contract execution compared to Borrowing

In practice, the cost of insurance Surety Bonds is lower than bank borrowing costs, thereby reducing the overall financial cost of executing projects and contracts.
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