Is your developer floating a bid for the construction of a high-rise building? Are you going to participate in a bidding process? Increase your chance of winning the bid by submitting your tender along with Bid Bonds – Tender Bonds. So, what is Tender Bond in Construction? Let us explain:
What is Tender Bond?
A Tender Bond or a Bid Bond is a type of Bank Guarantee that protects the project owner from falling into the risks of false or inapt bids. In the construction industry, Tender Bonds act as a guarantee to assure the project owner; that the winning bidder will honor the terms of the bid; also, will undertake the project as per the agreed terms. Further, it assures the project owner that the contractor is fiscally stable and has the required resource to take on a project if awarded.
Bid Bonds are issued by banks on behalf of their clients and in favor of the project owners. Since the bank stands as a guarantor for the contractor’s bid, the owners are more likely willing to work with contractors; who can provide a Bid Bond along with their tender bid.
How do Tender Bond Work?
When a developer floats a bid for a building construction project, they will receive tender bids from 100s of contractors who submit frivolous and lower bids to win a contract. On the other hand, developers would also have no other way of assuring that the selected contractor would be able to complete the project as per the quoted bid.
Here comes the importance of submitting the bid along with the Bid Guarantee. This assures the project owner that the winning contractor will complete the project at the agreed price. And also, it assures that in case if the contractor tries to raise the quote after entering into the contract, the project owner can claim the bond.
Further, submitting the quote with a Tender Guarantee will also help contractors to acquire other bonds such as performance bonds and advance payment bonds; if required.
How to Apply Bid Bond – Tender Guarantee?
If you require Bid Bond to submit your tender for a construction project, there are 2 options available. The first option is – You need to contact your bank with your MT760 request. In this case, your bank will ask you to provide a certain percent of the guarantee value; as collateral to proceed further. Once you provide the collateral and other related documents, your bank will start working on your request; and issue the required MT760 on your behalf. In case, if you can’t able to provide the collateral; then your bank will decline your request and mark you as not eligible to get the BG MT760.
And the second option is – Getting help from trade finance providers like us. With the use of our own bank facilities, we can issue the required bond; without blocking your cash funds.
Do you require Bid Bond to submit your tender? Is your bank declined your MT760 request; as you didn’t meet the banking terms? Contact us today!
Apply for Bid Bond – Tender Bond now and increase your chance of winning the contract!
Submit Your Tender with Tender Bond Guarantee