When you think of Surety Bonds, what “F” word comes to mind?
Is it Financing,
Funds Control or
Factoring?
After reading this article, it might be!
Let’s sort these out:
Financing is premium financing which is typically not available on most surety bonds b/c of their non-cancelable nature.
Funds Control is a procedure the surety may require. A 3rd party paymaster handles all the contract funds, pays all the bills to reduce the possibility of a Payment Bond claim.
Factoring is used to speed the contractors receipt of monthly payments. The factor is an intermediary that fronts each payment to the contractor immediately, then waits to be reimbursed when the money is released in due course.
Out of these three, Funds Control is the one you may run into. Sureties don’t like Factoring b/c it can result in the loss of dollars needed to complete the project.
Premium Financing is typically not available. However, Funds Control will guarantee the surety’s prompt receipt of the premium, if such an assurance is needed.
Wait! Here’s one more: FIA Surety! Your best carrier for Contract Surety, Site and Subdivision Bonds
FIA Surety / First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417
Visit us: www.fiagroup.com
Free CE course on 9/1/21: Advanced Financial Analysis Click
We are currently licensed in: NJ, PA, DE, MD, VA, NC, SC, WV, TN, FL, GA, AL, OK, TX