Work Order Financing/Supply Order Financing
Work Order Financing/Supply Order Financing:
Work Order financing is a set of financing modes allowed to the contractors to participate in tenders of different authorities and to execute their awarded works. The following types of facilities fall under this category –
- SOD (Earnest Money)
Under this, Bank Guarantee or undertaking is issued by the Bank in the form of PO on behalf of customers (mostly contractors) to enable to submit bid in a tender invited by different Government/ Semi-Govt. Organizations, Autonomous Bodies or other organizations acceptable to the Bank.
- Bid-Bond Guarantee
Under this, Bank Guarantee or undertaking issued by the Bank on behalf of its customers (mostly contractors) to enable to submit bid in a tender invited by different Government/ Semi-Govt. Organizations, autonomous bodies or other organizations acceptable to the Bank.
- Performance Guarantee (PG)
A Performance Guarantee is given after the tender or bid of a particular customer is accepted by the authority. It is a Guarantee where the Bank gives an undertaking to the authority that the customer will complete the job as per terms of the tender or to pay damage up to the Guarantee amount.
- Advance Payment Guarantee (APG)
This facility is a kind of Bank Guarantee or undertaking issued by the Bank on behalf of customers (mostly contractors) to enable to receive payment in advance against the work awarded by different Government/ Semi-Govt. Organizations, Autonomous Bodies or other organizations accepted to the Bank. This sort of Guarantee is needed, when the work involves initial cost like Advance Rent Payment regarding rental of machinery and procurement cost of raw materials etc.
- OD [Work Order/Supply Order]
This is a funded credit facility sanctioned to meet working capital requirement enabling the contractor for execution of work orders/supply orders awarded by different Government/ Semi-Govt. Organizations, Autonomous Bodies or other organizations accepted to the Bank. The amount of loan is disbursed upto a certain percentage of work order/supply order value.
- Retention Money Guarantee
Retention Money is a Bank Guarantee issued by the Bank on behalf of the contractors enabling the customer to release money retained from the work awarding authority which were deducted by work awarding authority from bills during work execution period.
