completion bond

Completion Bonding

A loan guarantee that a project will be paid for even if it is abandoned. Producers or publishers will make this guarantee to a bank in order to secure loans to finance their projects. Completion bonding benefits the bank as it guarantees that its loan will be paid. It also benefits the producer or publisher as the loan generally does not become payable until the project is completed, improving his/her accounting position. Finally, it benefits the person who actually develops a given project as the producer or publisher is discouraged from suddenly terminating that project. This form of financing is common to the video game and film industries.

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completion bond

A fidelity bond posted by a contractor or developer to guarantee that a particular project will be completed according to plans and specifications,on time,and without any liens incurred as a result of unpaid bills to subcontractors and suppliers;usually required as a condition of performing government work. It provides more coverage than a simple performance bond, which ensures that one party will perform if the other will perform, usually by payment.The completion bond is independent of any underlying contracts and any defenses to those contracts.