Performance Guarantees for Construction & EPC Contracts

Performance Guarantees for Construction & EPC Contracts

Performance Guarantees (Performance Bonds)

Owners and lenders want proof you will deliver to spec, on time, and within the contract rules. We arrange Performance Guarantees that satisfy beneficiary wording, cover claims up to an agreed limit, and stay valid through completion and handover. Each file is underwritten on technical and financial capacity, with tight attention to claim language and governing law.

Outcome: A bank-acceptable performance bond naming the correct beneficiary, aligned to your contract milestones, with clear validity and claim mechanics.

Who Uses Performance Guarantees

EPC contractors
Required to post security at contract award and keep it through handover.
Developers and sponsors
Needed to reach financial close or drawdown under loan agreements.
Consortia and JVs
Projects with joint liability or split scope requiring precise wording.
O&M providers
Frameworks that need ongoing performance cover across sites.

Terms and Pricing

Item Details
Coverage amount Typically 5%–20% of contract value (per contract requirements)
Validity Through completion and acceptance. Extensions available. Optional defects period cover.
Upfront premium 3%–7% of guaranteed amount, risk-based (minimum fee applies)
Annual or extension fee 2%–3% per annum, pro-rated for extensions beyond original validity
Security / conditions May require cash margin, standby support, covenants, or collateral (case by case)

Underwriting Focus

  • Contract review: scope, milestones, LDs, testing, acceptance, and claim language
  • Technical capacity: track record, key personnel, equipment, subcontract plan
  • Financial strength: balance sheet support, cash flow, hedging on major inputs
  • Compliance: KYC, UBOs, sanctions, permits, and jurisdiction checks
  • Interface risk: suppliers, grid or utility connections, and third-party dependencies

Process and Timing

1) Submit File
Contract draft or signed agreement, schedule, bond format, and KYC.
2) Risk Review
Capacity and financial screening. Clarify claim conditions and expiry.
3) Terms
Pricing, conditions, and wording aligned with beneficiary requirements.
4) Issuance
Bond issued and registered. Extensions processed on request.

Reasons We Decline

  • LDs or claim wording that create open-ended exposure without caps
  • No path to completion funding or missing critical permits
  • Balance sheet too thin for contract size and risk
  • Anonymous UBOs or incomplete compliance pack
  • Beneficiary refuses standard legal protections or governing law clarity

Documents Required

Document Purpose
Contract or EPC agreement with schedule Defines scope, milestones, and acceptance rules
Draft performance bond format Aligns wording, expiry, and claim steps
Company KYC, UBOs, and permits Compliance and eligibility
Financials and project budget Capacity to deliver and absorb delays
Supplier and subcontract plan Interface and timeline control

Apply for a Performance Guarantee

Send your contract, schedule, and bond format. We will review eligibility and return pricing and terms.

Start the Process

All guarantees are subject to underwriting, legal review, and approval. We do not issue unconditional guarantees. Extensions and defects liability coverage are available on request and may incur additional fees. Governing law and jurisdiction must be acceptable to the issuer.

Get Started With Us

Submit Your Deal & Receive a Proposal Within 1-3 Working Days

Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.


All submissions are promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.

Express Application Submit Your Deal
Request a Proposal
Request a Proposal / Submit a Deal

Thank you for considering working with us. A nominal fee of US$500 is required upon completion of each form. This fee covers the time and effort we invest in reviewing your submission and crafting a thorough proposal. We receive numerous inquiries and prioritize those that carry this fee, ensuring serious applicants receive prompt attention.

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Secure financing for business or real estate acquisitions. We ease transaction hurdles by reviewing cash flow, synergy opportunities, and exit plans. Complete the form for a customized proposal that supports your strategic investment objectives.

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Submit a Request

Once we receive your submission, our team will review your information to determine feasibility. If eligible, you will receive a proposal or term sheet within 1–3 business days. Visit our FAQ and Procedure pages for more information.

Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.

Still Have Questions? Schedule a Consultation

If you still have questions after visiting our FAQ and Procedure pages, we invite you to book a paid consultation for personalized guidance. A $250 USD fee applies per session.