Do you do business internationally? In that case, you may be asked to provide a warranty bond, both in the public and private sectors. With warranty bonds, you assure that you will pay, and you retain access to your cash flow. This enables you to close attractive deals with new parties. These are often deals involving large sums of money. Even a complicated project thus becomes feasible. People almost immediately talked about bank warranty bonds in the past, but nowadays, there are many alternatives on the market, mainly through insurers. They do not charge the warranty bonds to a credit facility and are often cheaper. And that offers opportunities. Warranty bonds give you a competitive advantage while keeping your cash flow uncompromised.
What is a warranty bond? A warranty bond means that someone assures that a particular action will take place. This could be a payment or the fulfillment of a contractual obligation. A warranty bond can be made within 24 hours.
In the past, bank warranty bonds were usually considered. Today, there is a wide range of alternatives in addition to the traditional bank warranty bonds. In this article, you can read how this development came about.
There are also several options in diversity with respect to warranty bonds. The most common forms are:
In the article ‘Financial guarantees through insurers: these are the opportunities‘, you can read about specific examples of the various forms of guarantee. You can also read about our tips for working with guarantees. This article details what you need to consider if you want to take out a guarantee.
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