Integrity Surety is a large writer of SBA-backed SBA Surety Bond Guarantees, and has several programs that require a “Bank Letter” with certain information. Also, oftentimes, a particular surety submission, particularly for a Performance Bond, needs a “Bank Letter” included to complete the underwriting. But what is a “Bank Letter” and what should it look like? What does SBA require?

A Bank Letter is a document provided by the bond Principal’s Bank(s), to provide the requestor (Surety in this case) some details and generalities about the Bank’s relationship, history, and current standing with the Principal.

While every Surety is different in their expectations, and every bank is different in what they are willing to provide or disclose, typically if we advise up front what information is most beneficial to approving the Principal’s surety request, the bank will comply.

Bank Letters should contain:

  • Official Bank Letterhead
  • Date the Letter was written by the Bank
  • Name(s) of the Principal / Account Holder
  • Types of accounts  (Business/Personal Checking/Savings, Lines of Credit, etc)
  • Balances of each type of account – Actual dollar amounts, ie “Current Balance $105,318.00” or “Average Balance last month of $104,000”.  Unacceptable is “balances approximately in the Low Hundred Thousands”
  • There should be information regarding “does” or “does not” provide other types of lending.
  • Lines of Credit information to include:
    • Maximum amount of credit
    • Renewal Date
    • How LOC is secured
    • Current amount owed and amount available (actual dollar amounts)
  • General History of Standing of accounts (usually “All accounts have been handled as agreed”)
  • Brief relationship between Bank and Principal (“_____ has been an excellent client of this bank since _____”)
  • Name, Title, Signature and Contact info for the Bank Officer writing the letter.

 Sample Bank Letter form and cover letter: What is a bank letter 

 

Should you have any questions about Bank Letters, SBA bonds, or any other Surety-related issue, please contact us at (800)592-8662 (206)546-1397 or submissions@integritysurety.com