A surety bond Oregon is a contract ensuring certain obligation to be met by the three parties involved in it: the person or an entity, which requires the bond, a principal person who needs the bond and an insurance or surety company, which guarantees that the principal will meet these obligations.Surety bonds are of two types: permit bonds for professionals and contractor bonds for public construction.
There are 5 main advantages of a surety bond Oregon:
- Penalty is Prevented
Several practitioners are licensed under surety bonds. These practitioners include debt collectors, contractors, investigators and the dealers of the cars. After taking a surety bond, there comes a guarantee to others that you will do your business in an ethical way. If you do anything against the surety bond (in an unethical or illegal way), you will be deadly penalized.
- Customer Confidence is Increased
With surety bond Oregon, all the concerns of customers about unknown business disappear. This increases their confidence level to do business with an unknown party. They know that the person they are doing business with is held accountable for all performance according to the bond.
- Alternative to a Letter of Credit
A Letter of Credit and surety bond go hand in hand. They work in a similar way. It is a 3rd party agreement of a bank stating a guarantee that all payments will be made according to the signed terms and conditions.
- Unnecessary Competition is Reduced
There is a strict process that all the surety bond applicants go through for the assessment of their financial security. Poorly qualified applicants are exempted from the bonds during the process.
- Maximum Availability of Opportunities
After obtaining a surety bond, your business becomes ethical and strong in the market. This strengthens more number of people joining you and allowing you to explore more opportunities.