Thank you for sharing!

Your article was successfully shared with the contacts you provided.
In the wake of the recession’s aftermath, many businesses are seeking greater access to credit. Whether the intended use of credit is to fund acquisitions, retire or refinance high interest rate debt, or to support capital expenditures, certain circumstances call for businesses to take a closer review of potential options before establishing or tapping into their credit facilities. As part of any business’ trusted advisers, agents and brokers play an integral role in reviewing what security solutions are available that won’t tie up credit and allow the client to take advantage of his financial standing and liquidity. 

Clients need to be strategic in their decision making, particularly in an environment when more businesses may be required to post security in the form of a bank letter of credit or surety bond. Educating your clients about alternatives like surety bonds can help them preserve their bank lines of credit for other strategic purposes. 

Read sidebar “Customers You Can Reach.”

When comparing a surety bond with a bank letter of credit, consider a variety of factors in addition to cost. Perhaps the most important consideration is how the decision impacts your client’s business from a macro perspective. For example, if your client foresees the need to access his cash reserves to maintain or grow his business, it is important to keep his bank line of credit fully available. Opting for a bank letter of credit in this particular scenario could financially hamstring your client down the road. A surety bond can help clients “check the box” without tying up lines of credit.

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.


  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.

Already have an account?



Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join PropertyCasualty360.com now!

  • Unlimited access to PropertyCasualty360.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including BenefitsPRO.com, ThinkAdvisor.com and Law.com
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.