By: Jack Anderson, President This is the final post in a series of blog posts where we have been exploring surety bonds and bank letters of credit – what each is, their differences, as well as advantages and drawbacks of each. Today, we are going to discuss the advantages and drawbacks to both a surety bond and a LOC. Let's start with the advantages: Surety Bonds Since the creation of the surety bond does not go through a bank or financial institution, a surety bond can free … [Read more...]
Archives for October 2015
Surety Bonds and Bank Letters of Credit Comparisons
October 14, 2015 by
By: Jack Anderson, President This is the 3rd post in a series exploring surety bonds and bank letters of credit – what each is, their differences, and advantages and drawbacks to each. What is the expected cost of each instrument? For a surety bond, cost is generally 0.5% to 2% of the contract price. A bond is project specific and covers the duration of the contract. The cost of the bond is included in the contractor's bid price. For a bank LOC, the cost is generally 1% of the … [Read more...]
