It is clear that performance and payment bonds provide many obvious benefits to owners, contractors, and claimants. Unseen Services of a Surety Surety services are not limited to prequalification and claims paying. In fact, much of what a surety does is for contractors either before or when they begin to have trouble on a project. Obligees, however, seldom hear about these valuable services of the surety. In fact, if everything goes right, the obligee never will know that there was trouble.
Sureties frequently receive requests for financing from contractors.
After all, if the contractor doesn't make payroll on Friday, you can be sure there will be no workers on Monday. Sometimes a contractor in financial trouble, but otherwise qualified to perform the work, can avoid default and complete all its bonded and nonbonded work with short-term financial assistance. Of course, contractors do not want the owners or developers to know that they are in any trouble, so neither the contractor nor the surety mentions this advance to the obligee. The needs of contractors in trouble range from something as simple as a loan to something as complex as the surety essentially taking over the contractor and assisting with completion of all projects. Avoiding a default is almost always better than cleaning up after one.