Unlock Working Capital. Strengthen Cash Flow. Protect Your Buyers.
In today’s market, access to liquidity is everything. Developers are under pressure to maintain momentum, fund ongoing works, and manage multiple sites simultaneously, all while ensuring their buyers remain protected. That’s where Deposit Release Bonds (DRBs) come in.
A Deposit Release Bond allows developers early access to buyer deposits before completion, providing vital working capital while maintaining full security for purchasers. Unlike traditional escrow arrangements, where deposits are locked away until project completion, a DRB enables funds to be released to the developer shortly after exchange — backed by the guarantee of a regulated surety provider. If the developer fails to complete the project, the buyer’s deposit is fully protected and reimbursed. This innovative product offers a win-win scenario: liquidity for developers, and peace of mind for buyers.
How Deposit Release Bonds Work
Traditionally, a buyer’s deposit remains held by solicitors until a project is completed. With a Deposit Release Bond in place, those funds can be drawn down early, freeing developers to reinvest directly into construction or new site acquisition. For the buyer, the bond provides absolute protection, the surety steps in to cover the deposit in the rare event the developer cannot complete. This arrangement gives developers flexibility to manage cash flow efficiently, reduces dependency on expensive mezzanine finance, and supports faster, smoother delivery.
Developer Benefits
- Immediate Access to Capital: Access buyer deposits at exchange to reinvest in live or upcoming projects.
- Enhanced Project Viability: Demonstrate stronger liquidity and financial stability to lenders and investors.
- Reduced Borrowing Costs: A cost-effective alternative to short-term or mezzanine finance facilities.
- Maintained Buyer Confidence: Full deposit protection encourages off-plan sales and buyer engagement.
Buyer Benefits
Full reimbursement of the deposit if the project is not completed. Confidence in purchasing off-plan, knowing funds are protected. Backed by a regulated surety provider ensuring full compliance and transparency.
Case Study: Real-World Results
Both developments benefited from early deposit access, accelerating progress and reducing funding costs. In one instance, a 5.5% DRB rate replaced mezzanine finance at approximately 12%, delivering significant savings while maintaining buyer protection.
By unlocking liquidity through Deposit Release Bonds, the developer was able to reinvest capital directly into the build, driving faster completion timelines and improved overall project performance.
Why Choose Advantage?
At Advantage Home Construction Insurance, we specialise in providing solutions that empower developers and their finance partners. Our Deposit Release Bond offering bridges the gap between liquidity and security — combining financial flexibility with compliance and reassurance for all parties involved. With years of experience supporting developers, funders, and brokers across the UK, Advantage brings a proven track record of expertise, efficiency, and trust to every project.
*Please note that this is a commercial profile.
The post Deposit Release Bonds: Liquidity for Developers. Security for Buyers. appeared first on Planning, Building & Construction Today.
