Tender or Bid bonds are undertakings given by a bank in support of a contractor/supplier bidding for work contract. They are normally submitted with other documents asked for in the invitation to tender and remain valid during the period of tender, plus a grace period to allow the beneficiary to make demand. The aim of the tender bonds is to provide the beneficiary with a financial remedy if the applicant fails to fulfill any of the tender conditions.
| Family Bank Bid Bonds(Image credit:Family Bank) |
Key Elements of the Bid Bonds
- They are used during the bidding stage
- They are usually between 2% to 5% the value of the bid
- They are used to alleviate the cost of non-performance during the contract award period stage
- The duration of the tender normally lasts between 30 to 150 days
Special Features of Family Bank Tender/Bid Bonds
- They are unsecured up to Ksh. 3 Million
- They can be issued within 1 hour after receipt of complete application
- They can be used at any of the Family bank branches in the country
- The rates at Family bank are both affordable and competitive
Application Requirements
The application is guaranteed by the following details
- Applicant’s name
- Beneficiary name
- Amount
- Duration of the bid bond
- Purpose of the Bid bond
A copy of the tender dopcument showing the above details(if available)
Tender/Bid Bond format
Other Types of Guarantees offered by Family Bank include;
- Performance Bond on flexible terms including 50% cash cover
- Advance payment guarantee
- Payment guarantee
- Facility Guarantee (to secure a credit line)
- Government Bonds; Custom Bonds, Transit Bonds, Immigration/security Bonds etc
Family bank also has the capacity and expertise to issue other forms of guarantees not mentioned above
Other Trade Finance Products Aavailable at Family Bank includes;
- Letters of Credit
- Collections
- Invoice discounting
- LPO finance
- Post Import Finance
- Structured Trade Finance
Information courtesy of Family Bank