Bonds to enter into a manufacturing contract

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A weakness in the value of local currency often provides opportunities to export from any market. You might never have expected to receive an order from overseas, and then at a time when the economy looks weak, a contact is made and the chance to win a new customer and gain revenue appears.

That event may lead to new plans and strategies to grow overseas. One of the first steps to be taken is to discover the challenges and obstacles that stand in the way of successfully meeting orders when they are received.

Pressure on cash flow will certainly be among them. Order and payment cycles may well be longer than in domestic trading. You may have concerns about the credit worthiness of the customer and on their side too, there may be concerns – can you meet the order as specified, will your business be able to keep to the terms agreed? The deal timescale may run to several years, adding another degree of complexity to the calculation.

This is where bonds play their part. Each stage of the trade cycle is supported by a specific type of bond or guarantee, from bidding for a contract through to performance guarantees that last beyond the date of the contract and into warranty periods. You will need to decide whether to use an on-demand bond or a conditional bond, giving different levels of protection on each side.

So how to use a bond? Get advice when you are using bonds for the first time. While the principles are easy to understand, the details should be matched to your own situation and the transactions you are negotiating. Our team of experts is ready to advise and support your business deals. 

To find out more about our services get in touch with us today

Bonds in construction and manufacturing Call us: +44 (0) 20 7216 1402

The growth of your company can soon be slowed down by payment delays or defaults, leading to cash shortages in the business. These barriers to expansion can be overcome by working with us.  We offer a range of credit insurance solutions, backed and supported by tools for decision-making, designed to put the power in your hands. Our insurance and bonding services are aligned to the size of your business: whether small or medium-sized, multinational, or a large enterprise operating across many markets. Our expert teams make sure the products and services you receive are tailored to your needs, match your sector, and support your development strategy.