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Originally Posted by Bond Magician Why is it that you can issue commercial bonds for people with bad credit, but not contract bonds? What is the difference? |
Contract bonds are in a different category than commercial bonds. A
contract bond is for the entire value of the contract. Because you could be personally responsible for the contract, Surety wants to make sure that if there is a problem and they have to complete a project on your behalf, that you have some financial way to reimburse them for any costs. If you have bad credit - there is probably nothing there to reimburse with.