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Finance allah shmoop What is a surety bond Think sure

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It t like certainty Remember when you were a kid

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at summer camp and had to pony up a buck

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to prove your heavy roller status at friday night's poker

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game And then there was a buddy who promised to

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pay more than that if you lost more than your

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buck Well surety bonds air kind of like that We

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repeat kind of a surety bond is an agreement between

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three parties One party guarantees that a second party will

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fulfil a promise to the third party For example one

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signer might guarantee that a small business will honor a

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government contract That is that small business will have to

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go borrow a whole bunch of money to go build

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a bunch of fence wire stuff for the government that

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they would need somewhere in the south And then some

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bigger contractor would guarantee that that small business will in

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fact perform on the contract If the small business doesn't

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perform the contract like as guaranteed building whatever fencing materials

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and the government wanted to build will the person who

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signed on their behalf would likely have to either pay

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up or build the fence themselves The big guy i

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either guarantor gives the little guy the principal surety in

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delivering the contract to whoever wants it toe happen A

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k a The oblige g remember that song about the

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government there yet oblige E ope elijah Life goes on

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Sorry we're done anyway all the parties involved bond with

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certainty the delivery of whatever product or service that surety

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bond is standing behind So yeah that's what it is 00:01:36.669 --> [endTime] And don't call us surety

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