This may have really severe consequences for the purchaser, as it would have to rush to the market, and procure the materials at prevailing market prices from retailers. In the process, the overall cost of the product that is being manufactured would increase substantially, leaving the purchasing company with losses. This is the reason, any business purchasing large quantities of materials insists on surety bonds. This post briefly discusses the significance of surety bonds; however, if you want to know more about them, you can visit: www.bondsexpress.com
These surety bonds also indicate to the purchasing company that the supplier has a good credit score, and will not have any financial problem that will hinder the contract. This trust is actually their trust on the issuer of the bond, who verifies the economic position of the supplier before issuing such bond. Effectively, the purchasing company is assured that the contract is with a genuine company, and therefore, any monies as required by the supplier may be paid in advance.