SUPPLY BONDS

SUPPLY BOND

American Surety Bonds Agency helps contractors and suppliers secure supply bonds for materials and equipment required under awarded construction contracts nationwide. Because requirements vary by obligee, project, and contract specifications, our underwriting team reviews your contract documents and financial profile before determining your bond amount and next steps.

A Supply Bond is a type of contract bond that guarantees a supplier will deliver the materials or equipment specified in the contract, on time and according to the agreed terms.

If the supplier fails to deliver as promised, the surety compensates the obligee — typically the project owner or general contractor — for the resulting loss, up to the bond amount. A Supply Bond is only required when the underlying contract specifically calls for one.

This bond goes by several names depending on the obligee or the governing contract form. You may also see it called:

• Material Bond

This refers to the same bond described on this page — the terminology differs by obligee and contract type, not by bond function.

Supply Bond requirements are set by the project owner or general contractor’s own contract terms, and — on public contracts — by federal, state, and local procurement law.

This bond may serve several purposes, including:

• Protecting the obligee against the risk of material shortages or delivery failures on a project, which can delay or derail construction work
• Meeting a bonding requirement stated directly in the contract or purchase order for materials or equipment
• Supporting the general payment-protection framework federal law establishes for “suppliers of labor and materials” under 40 U.S.C. § 3132, alongside the Miller Act’s broader $150,000 performance/payment bond threshold (40 U.S.C. § 3131)

Your contract or purchase order will state whether a Supply Bond is required. American Surety Bonds Agency assists with the bond application and underwriting process.

These bonds are underwritten individually, based on the supplier’s financial profile and the scope of the awarded contract. To apply, you’ll typically need:

• A completed Supply Bond application
• A copy of the contract or purchase order
• A job cost breakdown, if requested
• Personal and business financial statements — including credit history and net worth information — if applicable

Along with these documents, underwriters weigh your bid amount, personal and corporate credit history, net worth, and assets; your total work on hand; your previous experience; and the project’s scope of work.

You can apply either way: the Fast Track application for an awarded contract amount under $250,000, or the Bond Kit for contracts of any size or scope. After reviewing your application, the underwriter may request additional supporting financial or project documents and will advise if any further underwriting requirements apply.

Supply Bond premiums are individually underwritten, with rates typically starting at less than 1% of the contract amount and ranging upward depending on the bond amount, project scope, and the applicant’s financial profile. At American Surety Bonds Agency, we work with a wide array of markets — from preferred clients to non-traditional clients and everyone in between — to help find the right rate for your bond.

Obtaining your bond through American Surety Bonds Agency is simple:

1. Complete the online application — our Fast Track application for an awarded contract amount under $250,000, or the Bond Kit for contracts of any size or scope.
2. Our underwriting team reviews your contract documents, financial information, and project history.
3. Once approved, review your rate and finalize your bond.
4. Receive your completed bond to submit with your contract.

American Surety Bonds Agency has been helping contractors and suppliers meet their bonding requirements for decades. Whether you’re securing your first Supply Bond or managing multiple active contracts, our experienced team is here to make the process simple and efficient.

When you choose American Surety Bonds Agency, you’ll receive:

• Experienced surety bond professionals
• Competitive rates from leading surety companies
• Fast underwriting and responsive customer service
• A secure online application process
• Assistance throughout the bonding process

Above all, we’re committed to helping you meet your bonding requirement quickly and correctly, with experienced guidance every step of the way.

Contact American Surety Bonds Agency toll-free at (877) 201-8976 or our Atlanta office at (404) 486-2355. Our team can answer questions about your specific Supply Bond and project details and walk you through the application process.