Rakennusyritys oli voittanut tarjouskilpailun liikekiinteistön saneerausurakasta. Kyseessä oli yritykselle merkittävä projekti, joka toisi töitä useiksi kuukausiksi. Ennen kuin urakkasopimus voitiin allekirjoittaa ja työt aloittaa, tilaaja edellytti urakkatakausta.  

Although the site, employees, and material deliveries were all ready, the project could not start until the required guarantee had been arranged. 

The challenge: the required guarantee was missing 

In construction projects, clients want to ensure that the contractor is capable of completing the agreed work in accordance with the contract. For this reason, construction contracts often require a performance guarantee. 

A performance guarantee protects the client if the contractor fails to meet its contractual obligations. It provides financial security for the client and strengthens trust between both parties, particularly in large or long-term projects. 

In this case, the lack of a guarantee was the only thing preventing the project from moving forward. 

The solution: A performance guarantee enabled the project to begin 

A performance guarantee is a financial guarantee issued by a bank or another financing provider. Instead of tying up its own funds as collateral, the contractor can have the financing provider issue the guarantee to the client on its behalf. 

Construction projects typically require two types of guarantees: a performance guarantee and a warranty guarantee. The performance guarantee remains valid throughout the construction period. The warranty guarantee continues after the project has been completed and covers any defects that arise during the warranty period in accordance with the contract terms. 

The performance guarantee usually needs to be provided to the client at the beginning of the project. For this reason, it is advisable to arrange the guarantee as soon as the contract has been confirmed to avoid delays in starting the work. 

The business owner contacted us to arrange the performance guarantee quickly so that the project could begin without delay. We found the most suitable performance guarantee for the company and handled the application process on its behalf. Once the guarantee had been issued, the contract could be signed and the project started as planned. 

The impact on the business 

The project started on schedule, and there were no delays caused by arranging the required guarantee. The construction company was able to focus on managing the project and carrying out the work without spending unnecessary time on arranging the guarantee or tying up its financing capacity. 

The client also gained confidence knowing that the project was backed by the required contractual guarantee. This strengthened trust between the parties and allowed the project to get off to a smooth start. 

When is a performance guarantee needed? 

A performance guarantee is often required when a client includes it as part of a construction contract. It is commonly used in construction, electrical, HVAC, civil engineering, and other contract-based projects. 

A performance guarantee is particularly suitable for companies carrying out projects where the client requires a contractual guarantee. It enables businesses to meet the client's guarantee requirements without tying up their own funds as collateral. 

If a company has several projects running at the same time, another option is a guarantee facility. A guarantee facility is a pre-approved guarantee limit provided by a financing partner, allowing new performance guarantees to be issued without a separate application for each project. This speeds up the launch of new projects and makes guarantee management easier, especially for companies that regularly carry out contract work.