What documents are required for a surety bond?
Requirements vary, but a surety may ask for accounts, recent management information, contract details, proposed bond wording, ownership information and details of existing workload and bond exposure.
Do I need to provide full company accounts?
Often, yes, although the exact financial information required depends on the applicant, bond amount and market.
Are management accounts required?
They may be requested, particularly where the filed accounts are historic, the business is growing quickly or the recent trading position has changed.
Does a surety need bank statements?
Some markets or circumstances may require additional evidence of liquidity, but there is no universal rule that bank statements are required for every case.
Does the surety need a copy of the contract?
It may. At minimum, the underwriter normally needs enough information to understand the contract value, scope, duration, beneficiary and obligation being guaranteed.
Do I need the bond wording before applying?
It is very helpful. The wording can materially affect the risk and may need to be reviewed before the surety can confirm that it is acceptable.
Can a surety quote without seeing the wording?
Sometimes indicative terms may be possible, but final acceptance can depend on the wording actually required.
What information is needed for a Performance Bond?
Typical information can include applicant financials, contract value and duration, bond amount, beneficiary, proposed wording, project experience and current workload.
What information is needed for an Advance Payment Bond?
In addition to normal underwriting information, the surety may want to understand the amount and purpose of the advance, how it will be used and how the exposure reduces or releases.
What if the company has no filed accounts?
New companies and SPVs may still be considered using other information, such as funding, management experience, ownership, opening financials, group support and contract details.
What if the latest accounts show a loss?
The underwriter may request an explanation of the loss together with more recent management information to understand the current position.
What if the company has negative net assets?
Additional explanation and current financial information may be required, together with details of liquidity, funding and any wider group support.
Do I need to provide details of existing bonds?
Often, yes. Existing bonds can form part of the applicant's aggregate surety exposure and may affect available capacity.
Why does the surety need work-in-progress information?
Existing workload can affect operational capacity, cash requirements and the amount of additional exposure the business can reasonably support.
Does the surety need information about other group companies?
It may, particularly where the applicant relies on a parent company or wider group for funding, management or financial support.
Will providing more information make the bond quicker?
A complete and relevant submission can reduce avoidable follow-up questions, although underwriting times still depend on the case, market and wording.
Can missing information cause a bond application to be delayed?
Yes. If the underwriter cannot understand a material part of the financial or contractual risk, further information may be required before the case can progress.
Should unusual financial issues be explained upfront?
Yes. Clear explanation of losses, negative net assets, restructuring or exceptional items is generally more useful than leaving the underwriter to infer the reason from the figures alone.