Bank Reference Letters - What Sureties Want To See
Updated: Nov 1, 2022
A bank reference letter is often required by a surety and is a letter from the principal’s bank or lender. The form exhibits account balances, available credit, the length of the relationship, and can ask if the credit accounts are current. Each surety has different expectations for the bank letter and every bank has different rules to what they are allowed to disclose. Obtaining a bank reference letter can often cost a fee, usually no more than $50.
Sureties want to see bank letters such as the example below:
Sureties use bank reference letters to verify lines of credit and often contain average account balances. Therefore, the bank letter is used to confirm that a principal has the financial means to borrow a certain amount of money or in a surety case, has enough money to obtain the adequate surety bond capacity needed for jobs.
Sometimes principals do not convey what is needed on the bank reference letter when requesting one from the bank. The bank then gives them a standard letter, which majority of sureties will reject, which is why it is vitally important the principal provide a list of specific information needed on the letter to the bank.
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