Bond Product
Advance Payment Bond
Security for mobilization or down payments released ahead of accomplishment.
Overview
An advance payment bond secures an advance or mobilization payment released by the obligee before corresponding work is accomplished. It is commonly issued at the full value of the advance and reduces as the advance is recouped from progress billings.
It is frequently required together with the performance security on infrastructure and supply contracts.
Purpose
- Protects the obligee's funds released ahead of accomplishment.
- Enables contractors to obtain mobilization funding at the start of a project.
- Keeps recoupment schedules enforceable through a surety undertaking.
Who needs this bond
- Contractors receiving a 15 percent mobilization or advance payment
- Suppliers requiring a down payment to procure materials
- Equipment vendors with milestone-based advance billings
Typical requirements
- Accomplished bond application with obligee and contract details
- SEC or DTI registration, Articles of Incorporation or business permit
- BIR Certificate of Registration and latest tax return
- Audited financial statements for the last two to three years
- Valid government IDs of signatories and board or partnership authority
- Copy of the obligee's bond requirement, invitation to bid, or contract
- Signed contract showing the advance payment provision
- Billing or request for release of the advance
Final requirements depend on the obligee and the issuing insurance company. See the full requirements guide.
Application process
Step 1
Submit the application
Open an application in your SuretyPH portal and enter the obligee, contract, and bond details.
Step 2
Upload requirements
Follow the guided checklist and upload each document securely to your application file.
Step 3
Pre-assessment
We review the file for completeness and refer it to a participating licensed insurance company.
Step 4
Quotation
The insurer evaluates the submission and issues a quotation covering premium, fees, and any collateral requirement.
Step 5
Payment and issuance
Once the quotation is accepted and the premium settled, the insurer issues the bond for release or delivery.
Frequently asked questions
Does the bond amount decrease over time?
Many advance payment bonds are written to reduce as the advance is recouped, if the obligee's requirement and the insurer's wording allow it.
Is this the same as a performance bond?
No. It secures the money advanced to you; the performance bond secures completion of the contract itself.
Related articles
SuretyPH is a digital information and lead-generation platform owned and operated by McMatthise Global Group Corporation. It does not independently underwrite, approve, bind, issue, or guarantee any insurance policy or surety bond. Evaluation, underwriting, premiums, approval, and issuance remain the responsibility of the relevant duly licensed insurance company.