10.16 Some sponsors will not be or are not in a position to consider bond financing as a source of funding. Bond underwriters or bond guarantors will require the contractor, who is usually one of the main sponsors of any project, to provide guarantees in the form of a letter of credit against their own balance sheet to protect the bond holders, or bond guarantor, against cost overruns or delays in construction. In some cases this protection is not only against cost overruns but also extends to protecting the guarantor or the bond holders against loss of expected returns on their investment. The impact of providing these guarantees restricts the financial capability of the contractor.