Surety Bond & Guarantee FAQ
The most common questions about letters of guarantee (carta fiança), surety bonds, performance bonds, and judicial and tender guarantees — answered. Clear guidance on cost, acceptance in court and in tenders, counter-guarantees, and issuance timelines, so your company can choose and obtain the right guarantee.
Fundamentals
What is a surety bond?+
A surety bond is a three-party guarantee in which a surety (the guarantor) guarantees to an obligee (the protected party: creditor, project owner, public body, or court) that a principal (the company being guaranteed) will meet a contractual or court obligation. If the principal defaults, the guarantor pays the obligee up to the bond amount and the principal reimburses the guarantor. It guarantees performance — it is not a loan.
Learn more: What is a surety bond
What is the difference between ERGO's letter of guarantee and a bank guarantee?+
ERGO's letter of guarantee (carta fiança) is issued by a guarantor, not a bank, and does not tie up your bank credit line. A bank guarantee is issued by a bank, uses your credit line, and usually pays on demand. ERGO's letter of guarantee preserves your company's liquidity and keeps your bank lines free.
Learn more: Surety bond vs bank guarantee
ERGO letter of guarantee or bank guarantee — how do the costs compare?+
The cost of ERGO’s letter of guarantee is set case by case, based on the risk analysis, the guaranteed amount, the term, the bond type, and the company’s profile. Unlike a bank guarantee, it does not consume your credit line or freeze your cash and bank lines. Get your quote online through the app or on WhatsApp +55 11 93444-0099.
Learn more: Letter of guarantee cost comparison
What are performance, bid, and payment bonds?+
A performance bond guarantees the principal completes the contracted work or service. A bid bond guarantees a bidder honours its proposal and signs the contract if awarded. A payment bond guarantees subcontractors and suppliers are paid. They are distinct bonds covering different phases of a contract.
Learn more: Performance bond vs payment bond
Does ERGO's letter of guarantee consume my bank credit line?+
No. Unlike a bank guarantee, ERGO's letter of guarantee is issued by the guarantor based on the principal's credit analysis, without freezing your bank line or requiring cash collateral. Your credit lines remain free for working capital and other operations.
Do I need a personal guarantor for a rental guarantee?+
No. With a rental guarantee for a commercial lease, the guarantor itself secures the rent, condo fees, and property tax to the landlord, removing the need for a personal guarantor or cash deposit. ERGO serves companies, with a credit review and a quote.
Learn more: Rental guarantee
What is an SKR and can I "monetize" it?+
No. An SKR (Safe Keeping Receipt) is a custody document: it proves that the custodian holds an asset. It is not a promise of payment, it does not turn into money on its own, and it cannot be "monetized". Any offer to "monetize" or "leverage" an SKR for credit is a sign of fraud.
Learn more: What is an SKR
Is the guarantee accepted internationally?+
It depends on the bond type, the wording, and the obligee. Bid, performance, and advance payment bonds follow international standards and can be issued for obligations abroad, subject to the applicable legislation and each obligee's requirements. The guarantee wording is tailored to the contract and jurisdiction.
Cost & Timelines
How much does a surety bond cost?+
The cost is set in the quote, based on the risk analysis, the guaranteed amount, the term, the bond type, and the principal’s credit profile. The stronger the principal, the better the terms. Get your quote online through the app or on WhatsApp +55 11 93444-0099.
Learn more: Surety bond cost
Is the fee paid once or per year?+
The fee is quoted on an annual basis and is due while the guarantee is in force. For guarantees shorter than a year the fee is prorated; for multi-year obligations it renews (or is paid in instalments) each period. It is not a deposit — it is the cost of the risk the guarantor assumes.
How long does it take to issue a guarantee?+
Fast issuance once the documentation is complete. Larger or structured obligations may need extra analysis. ERGO uses agile analysis and digital issuance with an ICP-Brasil certificate.
Judicial Guarantee
Do courts accept a letter of guarantee instead of a cash deposit?+
They may. The judicial guarantee is filed by a motion in the case, and acceptance depends on the judge's decision. The letter of guarantee typically covers the debt plus 30%, as required by the proceeding.
Learn more: Judicial guarantee for labor claims
Can I replace a cash deposit I already made?+
You can ask the court to replace a cash deposit with a letter of guarantee (usually with the 30% add-on required by the proceeding), freeing the amount back into your working capital. The motion is filed in tax, civil, and labor enforcement cases, and replacement depends on the judge's approval.
Learn more: Replacing a court cash deposit
Public Tenders
What guarantees do public tenders require?+
The tender notice defines the required guarantee, both at the bid stage and for contract performance. The performance guarantee is usually capped at 5% of the contract value, rising to up to 30% for large-scale engineering works, in which case the tender notice requires the step-in (retomada) clause. Acceptance of the letter of guarantee depends on the tender notice and the contracting party.
Learn more: Guarantees in public tenders
What is the step-in (retomada) clause?+
The step-in clause provides that the guarantor takes over and completes the contract if the principal defaults, instead of only paying the guarantee amount. It is usually required by the tender notice for guarantees of up to 30% on large works, giving the public authority stronger assurance of completion.
Getting a Bond
Does the guarantee work for customs operations?+
It depends on the customs authority's rules for each foreign-trade regime and operation, such as transit, temporary admission, and instalment plans. Where accepted, the guarantee replaces cash deposits, frees capital, and speeds up imports and exports. Check with ERGO before relying on it.
Do I need a counter-guarantee or partners' personal guarantee?+
It depends on the risk. ERGO reviews the principal's finances and track record and may require counter-guarantees — such as the partners' personal guarantee, receivables, or other collateral — especially for large amounts or higher-risk profiles. Strong companies often obtain the letter of guarantee with reduced or no personal guarantee.
How do I get a quote?+
Just provide the obligation to secure (contract, tender notice, or lawsuit), the amount, and the term. ERGO reviews the request and returns a proposal with the rate and conditions. You can request a quote online or talk to a specialist on WhatsApp to speed up issuance.
Still have questions about your guarantee?
ERGO is a guarantor that issues letters of guarantee (carta fiança), judicial guarantees, and performance bonds for companies, without freezing your credit line. Get a tailored quote or talk to a specialist.