Replaces the advance-payment guarantee
Stands in for the bank guarantee project owners typically require before releasing a mobilization or advance payment.
Advance Payment Bond · APB-01
Draw your mobilization advance without a matching cash guarantee
An advance payment bond guarantees repayment of the upfront funds a project owner advances you - so you can draw the advance without locking up an equivalent amount in collateral.
0%
Cash margin for A+ credit profile
5–7 days
First-time issuance
0.5–3%
Annual premium
100+
Central Government procuring entities under GFR
At a glance
What this advance payment bond actually does
Frees up the advance itself
No need to post cash collateral roughly equal to the advance you're drawing - the bond does that job instead.
Cover reduces as you deliver
The guaranteed amount typically steps down as the advance is recovered against your running bills, per the contract's recovery schedule.
How it works
The bond lifecycle
A clear path from the security requirement to release or claim.
Advance clause triggers
Your contract entitles you to a mobilization or advance payment against security.
Bond issued
Assurety issues an advance payment bond sized to the advance amount - 5–7 days first time.
Advance released
The project owner releases the advance against the bond instead of a cash guarantee.
Cover steps down
Bond value reduces as the advance is recovered from your running bills, until fully adjusted.
Released on full recoveryThe real comparison
Advance Payment Bond vs. bank guarantee
Look beyond headline commission to the capital impact, speed and effective cost.
| Metric | Advance Payment Bond (Assurety) | Bank Guarantee |
|---|---|---|
| Cash blocked | 0% for A+ credit profile | ~100% of advance amount, usually as FD |
| Headline cost | 0.5–3% p.a. premium | 0.25–0.75% p.a. commission |
| Effective cost | Premium only - no opportunity cost | 8–10% once blocked collateral is factored in |
| Impact on advance drawn | Full advance available for mobilization | Advance effectively offset by the collateral requirement |
| Regulatory standing | Market-standard contract bond; named in the historical 2022 taxonomy | Traditional default instrument |
Cash blocked
Advance Payment Bond (Assurety)
0% for A+ credit profile
Bank Guarantee
~100% of advance amount, usually as FD
Headline cost
Advance Payment Bond (Assurety)
0.5–3% p.a. premium
Bank Guarantee
0.25–0.75% p.a. commission
Effective cost
Advance Payment Bond (Assurety)
Premium only - no opportunity cost
Bank Guarantee
8–10% once blocked collateral is factored in
Impact on advance drawn
Advance Payment Bond (Assurety)
Full advance available for mobilization
Bank Guarantee
Advance effectively offset by the collateral requirement
Regulatory standing
Advance Payment Bond (Assurety)
Market-standard contract bond; named in the historical 2022 taxonomy
Bank Guarantee
Traditional default instrument
Posting a bond instead of cash means the advance actually does what it's meant to - fund mobilization - rather than sitting offset against a collateral requirement.
Why Assurety
Built for how the requirement actually moves.
Fast issuance
Most advance payment bonds are issued within 5–7 business days.
Zero margin, qualifying credit
BBB+ and above often need no cash margin at all.
Contract-specific wording
Matched to the advance amount and repayment schedule set out in your contract.
Step-down structure
Bond value reduces in line with recovery of the advance, avoiding oversized cover late in the contract.
Works alongside your other bonds
Run an advance payment bond next to your bid or performance bond on the same contract.
Contract document review
We confirm the exact recovery schedule and format required before issuance.
Adoption
Accepted at meaningful scale.
3,300+
Surety bonds issued in India (industry estimate)
₹29,000 Cr+
Estimated value issued in India
₹10,000+ Cr
Issued via NHAI alone
Market standard
Named in the historical 2022 IRDAI taxonomy
Government and private project owners can be obligees, subject to applicable procurement rules and contractual terms. We confirm the accepted format for each contract before issuance.
Industries
Where this bond gets used.
01
Construction
Mobilization advances on works contracts needing upfront site set-up.
02Infrastructure
Large NHAI & metro contracts with material and plant advances.
03Energy
Mobilization advances on EPC contracts for renewable & grid projects.
04Manufacturing
Advances against long-lead equipment orders under PSU contracts.
05IT & Technology
Advance payments on large GeM systems-integration contracts.
Eligibility
What you need to qualify.
Underwriting considers the business, its credit position and the underlying obligation.
Requirement 01
Entity type
Pvt Ltd, Public Ltd, LLP, partnership or proprietorship
Requirement 02
Credit check
Corporate CIBIL mandatory; rating drives terms
Requirement 03
Tenure
Bonds available up to 7 years
Requirement 04
Not a substitute for
Loan repayment or financial guarantees
Regulated placement
Bonds are arranged only through IRDAI-licensed insurers approved for surety business. The issuing insurer is confirmed before placement.
FAQ
Questions, answered.
Get an advance payment bond for your contract
Tell us about your requirement and we'll have an indicative quote ready promptly.
