Bond Exoneration Delay Calculator

Surety bond release takes time. This calculator sizes delay cost.

Bond amount

Premium rate

Capital tied up

Cost of capital

Delay months

Total delay cost

$18,842

Premium cost

$9,917

Capital carry

$8,925

How the math works

Premium = bond × rate × (months/12). Capital carry = collateral × cost × (months/12).

Track exoneration pro-actively. Bond release often sits on a city engineer's desk for weeks because nobody is chasing it. Assigning an internal owner and weekly follow-up typically shaves 30-60 days off release timeline and saves real dollars.

How to Use

Enter bond amount.
Enter annual premium rate %.
Enter capital tied up (collateral).
Enter cost of capital %.
Enter months until release.
Read total cost of delay.

Frequently Asked Questions

Why bonds needed?

Performance bond: guarantees completion per plans. Subdivision bond: guarantees public improvements. Payment bond: guarantees subcontractor payment. Maintenance bond: guarantees 1-3 year defect period. Typical rate 1-3% of bond face.

Exoneration timing?

Public improvement bond: released after acceptance by local government (often 90-180 days after completion). Performance bond: released at substantial completion. Maintenance bond: held full maintenance period (often 12-24 months).

Capital impact?

Bond often requires collateral (letter of credit, cash) equal to 10-25% of bond face. Exoneration releases collateral. Each month of delay = cost of tied capital + ongoing premium. Typically $2-10k/month on larger bonds.

Who owns this risk — sponsor or lender?

Construction risks are typically shared: hard-cost overrun owned by sponsor (via completion guaranty), soft-cost and delay risks shared per contract, force-majeure excused but bears owner carry cost. Document risk ownership in the loan agreement and GC contract before closing. Disputes get expensive when roles are unclear. Institutional deals spell out every allocation in writing.