GM Financial Services

Construction Guarantees

GM Financial Services: Secure Your Project with Confidence

In the high-stakes world of construction, financial security is essential for protecting projects and ensuring all parties meet their obligations. GM Financial Services specialises in providing tailored Construction Guarantees to mitigate risk, offering solutions that help you achieve project success from start to finish. Our Construction Guarantees cover all your needs, from Performance Guarantees and Advance Payment Guarantees to Bid Bonds and Retention Guarantees, all backed by industry-leading expertise and financial strength.

What Are Construction Guarantees?

Construction Guarantees are financial instruments designed to protect project stakeholders against risks such as contractor default, delays, or financial instability. These guarantees assure the Employer (Principal) that funds will be available to complete the project if the contractor cannot fulfill the contract, aligning with standard frameworks such as JBCC, GCC, NEC, and FIDIC.

At GM Financial Services, we have established relationships with a network of reputable insurers who conduct the necessary financial assessments and approvals. This collaborative approach ensures that the construction project is safeguarded by industry-leading risk carrier’s expertise and financial backing, providing the highest level of security and assurance.

Our Construction Guarantee Options

  • Bid Bonds: Enhances the credibility of contractors during the tender process, demonstrating commitment to bid terms.

  • Advance Payment Guarantees: Protects upfront investments made by the Employer if the funds are not used for project-specific expenses.

  • Performance Guarantees: Secures the Employer’s investment by covering up to 10% of the contract value, ensuring project completion.

  • Retention Guarantees: Provides added protection by substituting retention funds, allowing contractors to access funds for cash flow while securing the Employer’s interests.

Process for Securing Construction Guarantees

The Employer and contractor outline the project scope, pricing, and guarantee requirements.

Before an application for a construction guarantee can be made, a guarantee facility must be established:

  • Download the Guarantee Facility Application and complete it. 
  •  Email it, along with the following information to info@gmfs.co.za

    • Company Profile. The latest two years signed financial statements.

    • Most recent Management Accounts. (i.e., from the date of the last financial statement to the current date but not older than three months from the current date.)

    • Latest Creditors and Debtors ageing.

    • Company shareholding organogram.

Step 3: Identify the type of Construction Guarantee required.

  • Download the Bid Bond Guarantee Application and complete it. 

  • When completed, please email this, together with the following information to info@gmfs.co.za.

      • Details of the Bid Bond requirements as described in the tender documents.

      • Full details of the scope of work for which you are tendering for.

      • The duration and value of the project.

      • Type of guarantees and percentage of each guarantee in relation to the tender prices required.

      • Bid Bond guarantee format as detailed in the tender contract conditions.

Bid Bond Application Download
  • Download the Advance Payment Guarantee Application and complete it. 

  • Then email this application together with the following information to info@gmfs.co.za.

      • Letter of appointment/contract award letter.

      • Advance payment guarantee format as detailed in the tender contract conditions.

      • Details of the intention for the Advance Payment e.g. list of materials that will be purchased with the advance payment.

      • Project timeline, cashflow forecast and how the advance payment would be recouped.

Advance Payment Guarantee Download
  • Download and complete the Performance Guarantee Application. 

  • Then email this application together with the following information to
    info@gmfs.co.za.

      • Letter of appointment/contract award letter.

      • Performance guarantee format as detailed in the tender contract conditions.

Performance Guarantee Download
  • Download and complete the Retention Guarantee Application. 

  • Then email this application together with the following information to info@gmfs.co.za.

      • Letter of appointment/contract award letter if the guarantee will be issued at the inception of the project. If not, please forward us the:

        • Latest payment certificate

        • Latest site minute meetings

        • If the project is completed the practical/completion or takeover certificate.

      • Guarantee format as detailed in the tender contract conditions.

Bid Bond Application Download

Insurers set the terms for the guarantee facility/Construction guarantee amount(s) and pricing(s), and if accepted, they provide a guarantee draft(s) for the Employer’s approval.

Once the guarantee draft(s) has been approved and all the terms of the facility conditions have been met, the guarantee is issued.

Why Partner with GM Financial Services?

  • Industry Expertise: Over two decades in construction finance.

  • Client Services: We have custom-made software designed to enhance workflow monitoring of all guarantee facilities, exposures, premiums paid, expired conditions and dates, giving us the ability to fact-track processes and have all relevant information at our fingertips.

  • Strong Insurer Partnerships: Access to competitive pricing and tailored options.

  • Proven Track Record: Trusted by South African construction companies.

  • Responsive Service: Quick turnarounds and dedicated support.

Need more information or a personalised quote? Complete the form, and our team will get back to you promptly.

Phone: 011 763 1556
Email: info@gmfs.co.za
Website: www.gmfs.co.za

Construction Guarantee Thank you
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