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No, it does not guarantee funding; however, it's as close to guaranteed as possible. A surety shifts the credit and focus from the principals of the project to the surety company. Lenders will still conduct due diligence to ensure the project is legal and there is a source of funds.

No. We approach lenders with your insurance binder already in place. An insurance company expects that you will pay a premium to activate the bond. Many times we are able to secure a financing commitment before you pay the premium, but you must pay the premium and have an active surety bond that can be verified by the lender before funding.

First of all, lenders have seen everything. Everyone has a multi-million dollar project with no capital and thinks they can get it funded at 100% with no skin in the game.

If you think a lender is going to pay for their own surety bond, fund against that surety bond, and then give you the capital, you have zero business looking for funding and please do not waste our time.

Creative financing is different. For example, you have the capital to pay for a surety bond, but you want to build that cost into funding so you are not stretched financially.

Sure, you can do that as you submit your own financial data. However, that is structuring, and we are not a part of that. An example would be:

XYZ Corp is seeking funding for a $95M project. They are seeking a $100M project financing loan and have been quoted for a surety bond of $100M with a premium of $2.5M. XYZ has $10M of capital on hand but wants to be careful with it. They pay the $2.5M premium for the bond and receive $100M funding from Acme Hedge Fund. From that funding, 2.5% is immediately used to repay the $2.5M that XYZ Corp "loaned" itself for the premium of the surety bond. Now, instead of carrying a loan of $95M, XYZ is carrying a loan of $100M.

This is how creative funding works. Notice carefully, XYZ Corp has capital, and they have paid for a surety bond. It is the project owner's duty to prepare a funding structure so they succeed.