- Over 25 years of experience in the performance bond industry
- An Australian first that offers an online QBE Insurance backed solution
- The surety bonds ensure council receives the security they deserve, and developers maintain liquidity
Delivering an outstanding development today is becoming increasingly tough, with challenges weighing ever heavier on the minds of developers. Access to working capital is essential to every developer, small or large.
This is the challenge John Gardiner and his company, SmartBonds, have set out to overcome, delivering certainty for both developers and councils.
Who is SmartBonds?
John Gardiner has over 25 years of experience in the performance bond industry. The industry gained a footing in Australia during the 1980s and has grown year after year since.
Throughout Australia, it is standard for developers seeking development approval (DA) to pay a deposit or provide a bank guarantee to councils, a development necessity that robs companies of their working capital.
Enter SmartBonds, a first for the Australian market that offers an online QBE Insurance backed solution which ensures council receives the security they deserve, and developers maintain liquidity.
Giving surety through bonds
SmartBonds is a simple, online solution. Developers apply for a surety bond through SmartBonds’ online portal by simply entering the bond details, including bond amount, property address, council name and ownership particulars. The portal generates a fixed price quotation and proceeds to complete background checks on the developer. Once approved, the developer then electronically signs the application form, pays the fee, and the portal generates a guarantee that the developer can then submit to council, instead of a deposit or bank guarantee.
Councils can easily check the legitimacy of the bond by heading to the SmartBonds website and entering the bond details provided by the developer.
SmartBonds is backed by QBE Insurance and has undergone a rigorous prevetting process prior to being appointed as an authorised managing general agent (MGA) with delegated underwriting authority.
From the council’s perspective, SmartBonds meets State Treasury requirements in that QBE is APRA licensed, is rated A+ Stable by Standard & Poors, and the bond undertaking is unconditional and does not include an expiry date.
Once a bond has been issued it remains at the discretion of the council for the life of the development. Should the development go astray the council can claim on the bond and QBE settles by EFT within 5 business days.
Once a development is completed, the bond expires on the written direction of the council. Bond fees are calculated on the duration of the development and are flexible and fair.
It is even possible for a developer to replace existing deposits and bank guarantees with a SmartBond (subject to council consent), meaning they can get their deposit back sooner, and regain control of their working capital.
Mutual benefits for developers and councils
Using a surety bond is a win-win for everyone in the development process.
The benefit for developers is clear: liquidity. Instead of stumping up the cash prior to construction, developers retain their ability to deploy funds where it is needed most.
Both the developer and the council benefit from significantly reduced administration and opportunity costs. With a SmartBond, neither the developer nor council have to chase up paperwork associated with processing the refund of a deposit.
For more information or to apply for a council bond, head to SmartBonds.
