Managing Risk (Bankers)
For years, surety bonds have been mandated by law for federal public construction projects under the Miller Act of 1935. Many state and local governments also require surety bonds on their public construction projects with “Little Miller Acts.” Surety bonds also are used for many private projects as well. Moreover, an increasing number of construction lenders are now recognizing the wisdom of requiring contract surety bonds to protect loans secured by private sector projects. Performance and payment bonds protect your lending capital by ensuring completion of the contract and preventing subcontractors from filing mechanics’ liens on the project.