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How much capital does a bond free up?

Developers can guarantee public improvements with a bank letter of credit that ties up cash — or a surety bond that doesn't. Run your project's numbers and see the difference in liquidity, then get a line-by-line breakdown and a bond quote.

There are two ways to guarantee your public improvements to the municipality: a bank letter of credit that ties up your cash, or a surety bondthat doesn't. Enter your numbers to see the difference on your project.

$

The value of roads, sewer, grading and other public work the town requires you to guarantee — usually the engineer's estimate.

What your bank charges each year to issue a letter of credit — commonly 1–2% of the amount.

How long the guarantee stays in place, until the town inspects and accepts the improvements.

Roughly what a dollar earns back in your business — the next phase, another lot, or borrowing less. Set it to your number.

A bond keeps cash or credit working for you
$2,000,000

Stays available for construction, land, and your next project instead of sitting at the bank. Put it to work at 10% and it could earn you about $400,000 over 2 years.

Letter of creditSurety bond
Cash locked up$2,000,000 → $0
Fees over the project$60,000 vs $60,000
Bottom line: the fees are about the same, but the bond frees up $2,000,000 to keep earning — worth roughly $400,000 to you over 2 years.

Get the full breakdown + a bond quote

We'll send a line-by-line comparison for your project and confirm your exact bond rate — no obligation. Or call 610-489-6168.

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