We provide lender-ready capital raise packaging and debt or equity placement support for business owners and buyers looking to secure serious term sheets and close funding on a defined timeline.
For business owners and acquirers pursuing private debt or equity, submit your deal for review. We revert within one working day with next steps and either a quote for our services.
For pre-submission discussions, we offer paid consultations. To initiate underwriting and lender outreach, submit the deal.
Contract Risk And Credit Support
Performance security guarantees are credit-backed promises that protect a buyer or project owner if a supplier or contractor fails to perform what they signed up to do.
Think of them like this: If we do not deliver what the contract requires, you can claim and get paid.
In most contracts, the risky period sits between signing and delivery. Work is underway, timelines are tight, cash is moving, and reputations are exposed. Performance security is the backstop that makes the deal approvable: the beneficiary has a defined claim path if performance fails.
Key concept: performance security is not about punishing suppliers. It is a structured risk control that makes execution financeable and board-ready.
A performance security guarantee is typically issued as one of the instruments below. They often look similar commercially, but the legal framework, claim mechanics, and underwriting posture can differ materially.
| Instrument | Who Issues It | Best Use Case | Typical Watch Outs |
|---|---|---|---|
| Bank Guarantee (Performance Guarantee) | Bank | Contractor performance risk where on-demand wording is standard | Claim wording, expiry mechanics, governing rules and jurisdiction |
| Standby Letter of Credit (SBLC) | Bank | Cross-border deals where standby documentation is preferred | Presentation conditions, document list, notice and timing requirements |
| Surety Performance Bond | Insurer or surety | Construction and infrastructure where bonds are market standard | Claims can be more process-heavy and slower than on-demand forms |
| Parent Company Guarantee (PCG) | Parent company | Group-backed obligations where parent strength is credible | Enforceability, financial capacity, and limitations in the PCG text |
| Retention Bond or Warranty Bond | Bank or surety | Replace cash retention or back defects liability obligations | Reduction schedule, defects trigger logic, expiry alignment |
| Advance Payment Guarantee | Bank or surety | Buyer prepay risk for long lead equipment or mobilisation | Linkage to advance payment schedule and repayment proof requirements |
Performance security solves a classic contracting problem: you are exposed between award and delivery, and your remedies may be slow or uncertain if things go wrong. The guarantee gives you a faster credit-backed recovery path than relying only on litigation or termination.
People obsess over the percentage and ignore the claim style. That is a mistake. Claim style drives how fast the beneficiary can claim and how much the applicant is exposed.
Typically requires a written demand and a simple statement that the applicant is in breach, often with minimal documentation. This gives the beneficiary strong protection and a cleaner enforcement path.
Requires evidence of default, which can include engineer certificates, court orders, arbitration awards, or detailed documents. This reduces applicant risk but can delay claims.
The market range varies by sector, jurisdiction, and employer expectations, but common patterns repeat.
Often 5% to 15% of contract value. EPC and construction frequently cluster around 10%, with reductions after completion in some contracts.
Valid through completion, then sometimes reduced for defects liability. The reduction schedule must match the contract milestones and acceptance mechanics.
Some forms expire on a fixed date. Others have auto-extension or require notice of non-extension. This is a common trap that gets missed in procurement.
SBLCs and guarantees can sit under different documentary frameworks depending on the instrument and bank. The choice affects presentation requirements and dispute behaviour.
Performance security is not the same as a payment guarantee. A payment guarantee protects the seller against buyer non-payment. Performance security protects the buyer or project owner against supplier non-performance.
It is also not “free comfort.” For the applicant, it is real credit exposure. Banks and sureties usually require collateral, cash margin, a credit line, or all three depending on the applicant profile and the form of guarantee.
Most failures are not because the beneficiary is wrong. They happen because the demand does not match the exact presentation conditions, timing, or beneficiary details. Common traps include:
Practical insight: the safest way to handle wording is to pre-agree the guarantee form in the contract and treat it as a controlled schedule, not a loose appendix.
Contractor posts a 10% performance guarantee to the project owner until completion, then the security reduces through defects liability depending on contract terms.
Manufacturer provides an SBLC as performance security until commissioning tests and acceptance are passed, then the instrument expires or reduces.
Contractor provides a retention bond so the owner can release withheld cash while still holding credit-backed cover for defects and warranty obligations.
Buyer pays an advance for long lead items. An advance payment guarantee protects the buyer if delivery fails and the advance must be recovered.
Financely supports commercial structuring and lender decisioning for trade and project transactions where performance security is required. We help teams map the right instrument mix, sanity-check claim mechanics, and package the deal so credit providers can underwrite the applicant’s issuance capacity. If your transaction is project-linked, see Project Finance. If it is trade-linked, see Trade Finance.
Submit your draft contract, required security wording, contract value, timeline, and applicant profile. We will revert with an issuance feasibility view and the documentation checklist.
Many markets sit in a 5% to 15% range depending on sector, jurisdiction, and employer preference. The claim style and wording often matter more than the percentage.
They can serve the same economic purpose as performance security, but the documentary framework and presentation requirements can differ. That difference impacts claim mechanics and bank preferences.
Only if the instrument is drafted as demand style with minimal documentary conditions. Even then, the demand must meet exact presentation requirements.
Typically financials, contract details, performance track record, and a view on collateral or cash margin, depending on the applicant’s credit profile and existing facilities.
Presentation defects. Wrong beneficiary name, wrong statement text, late presentation, missing documents, or a mismatch with the instrument’s expiry mechanics.
Treat it as a controlled schedule agreed before award, with clear expiry, reduction, claim statement wording, and a process for amendments if the project timeline moves.
Performance security works when the instrument is drafted for reality: correct beneficiary details, clear expiry and reduction logic, clean claim wording, and presentation rules that your teams can execute under stress.
Financely advises growth-focused businesses on accessing capital by introducing their opportunities to professional investors. Financely is not a securities broker or dealer. Where appropriate, engagements are coordinated with regulated broker-dealers, investment banks, legal counsel, and other specialists.
Financely does not solicit, offer, or accept orders to buy or sell securities and makes no assurance regarding capital-raising outcomes.
Services are strictly business-to-business. Financely does not provide personal finance, consumer credit, or retail advisory services.
Advisory services are reserved for post-revenue companies that recognize the time and resources required for professional underwriting.
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Email supportdesk@financely-group.com for general enquiries, press & partnership requests.
All mandates start with an RFQ. We review submissions, issue a brief Go/No-Go memo, and where bankable, release a Term Sheet that leads to funding. We arrange capital across Senior Secured, Unitranche, Second Lien/Mezzanine, Preferred Equity, and Gap Solutions. We do not process deals by email or chat.
Letters of Credit, Standby LCs, Confirmations, Receivables Finance, and Inventory Lines with control.
Funding arranged for trade flows with instruments sized to your cycle and aligned to delivery and settlement.
Move forward to secure working capital and keep goods moving. Submit the RFQ to start underwriting for funding.
Limited or non-recourse structures for energy and infrastructure with lender-ready materials.
Funding solutions aligned to project cash flows with credible covenants and conditions to reach notice to proceed.
Advance the file to termable status. Submit the RFQ so we can underwrite and secure funding.
Debt and Preferred solutions anchored on cash flow, Quality of Earnings, and clear closing mechanics.
Funding across senior, unitranche, and preferred to match stable cash flows and acquisition timelines.
Get financed on workable terms for closing. Submit the RFQ to start underwriting.
Acquisition, development, bridge, and refinance with lender-ready packs and third-party reports managed.
Funding calibrated to DSCR, leverage, and tenancy with terms designed to close.
Move to a financeable package. Submit the RFQ to initiate underwriting for funding.
KYC and Source of Funds required. Engagements are best-efforts and subject to underwriting. Preference for operating companies with meaningful revenue. See our FAQ and Procedure.
Financely Inc. (“Financely”) provides corporate-finance advice and is wholly owned by Aurora Bay Trust, a trust formed under Bahamian law, together with its authorized affiliates. Depending on deal structure, jurisdiction, and local rules, engagements may be carried out through Financely Group LLC, a non-deposit-taking, non-banking financial company; Ashford Capital Advisory LLC; or another related entity.
Financely and its affiliates are not registered as securities broker-dealers and do not execute securities transactions or hold client funds or securities. When a mandate involves the purchase or sale of securities and a registered intermediary is required, any orders are introduced to and executed by one or more independent U.S. broker-dealers registered with the SEC and FINRA. Those broker-dealers are solely responsible for trade execution, custody, and related regulatory obligations. Nothing in this material constitutes an offer, solicitation, or recommendation to buy or sell any security or to engage in any specific transaction. Before engaging Financely Group LLC, Ashford Capital Advisory LLC, or any affiliate, you are responsible for confirming that such engagement complies with your own legal, regulatory, tax, and other requirements. In the United States, certain advisory activities may be conducted in reliance on exemptions available under the Investment Advisers Act of 1940, including the “foreign private adviser” exemption where applicable. Our services and regulatory status may vary by jurisdiction and by transaction type.
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