Lease guarantee bonds by the numbers
Deposit vs bond, side by side
Both protect the landlord. The difference is what happens to your cash. A cash deposit sits with the landlord for the life of the lease, doing nothing for you. A lease guarantee bond gives the landlord the same recovery source, but you keep your capital and pay only a premium.
| Cash deposit | Lease guarantee bond | |
|---|---|---|
| Your cost up front | The full deposit (often months of rent) | A premium, a percentage of the amount |
| Your working capital | Tied up for the life of the lease | Stays in the business |
| Landlord protection | Draws on the deposit | Claims on the bond |
| If you default | Deposit is applied | Surety pays, you reimburse |
Who it fits
Tenants signing a commercial lease who would rather not surrender a large deposit, growing businesses that want their capital working, and startups a landlord asks to secure the lease. It is a close cousin of the letter of credit, but without freezing a chunk of your bank line.
What it costs
You pay a premium, a percentage of the bonded amount, set by underwriting and driven mostly by your credit and financials, and a qualifying single-year premium is generally a deductible business expense. Confirm the amount and bond form your landlord wants, then get a quote and we will place it.