We recently had a long conversation regarding “Completion Bonds.” Think you know what they are? We couldn’t agree on it!
- Is a Performance Bond a Completion Bond? They do guarantee that a project will be completed.
Is a Completion Bond required when a surety has a defaulted contract and they hire a completion contractor to finish the job? - Are Completion Bonds required by lenders to assure that projects with construction loans are completed?
Here are a few more confusing bond things:
- Working Capital does means the same as Net Quick: It is a measure of a company’s short term financial strength.
- Net Worth is the same as Equity: What’s left over if the company sells everything and shuts down.
- Sales = Revenues: The money a company takes in during a certain period of time.
- Net Profit = Net Income: The after tax earnings of a company.
- Under Billings = Costs and Estimated Earnings in Excess of Billings. A measure of the extent to which the contractor’s billings are not concurrent with (less than) the degree of job completion.
- Over Billings = Billings in Excess of Costs and Estimated Earning. This measures the portion of the billings that are more than the % of completion.
- Back Bond = Subcontract Bond: A Performance Bond given “back” by a subcontractor to the general contractor in support of their subcontract.
- Site Bond = Subdivision: Subdivision projects are bigger and involve multi-unit housing. Bond guarantees the construction of “public improvements.”
- Funds Control = Funds Administration = Escrow: A professional paymaster handles all the money and pays the bills on a contract. They pay everyone, including the contractor.
- Retainage = Hold Back: A % of contract funds held (retained) by the project owner or Funds Administrator to assure completion of the final contract details. Then the money is released to the contractor.
- Completion Bonds are technically called “Film Production Completion Bonds.” They guarantee a Movie Producer’s work in financing / creating a film and getting it “in the can.”
- FIA Surety = Your Bond Problem Solver: Our experts have been solving surety bond problems since 1970. We’ve seen it all (and know how to fix it.)
FIA Surety is a NJ based bonding company (carrier) that has specialized in Site, Subdivision, Bid and Performance Bonds since 1979 – we’re good at it! Call us with your next one.
Steve Golia, Marketing Mgr.: 856-304-7348
First Indemnity of America Ins. Co.
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