The construction industry is doing quite well these days, due to the recent economic upswing. More importantly, green and sustainable building trends making headway has helped the industry significantly, and the growth has produce more jobs in what once was a sagging economy.
The ability to obtain surety bonding is a necessity in the commercial construction industry.
General contractors often require surety bonds from their subcontractors and more and more private entities are requiring bonds to protect themselves against the possibility of contractor default. Establishing and maintaining a surety line can be challenging for a construction company, which is why it’s important to select a reputable bond broker and surety company.
The bidding process is vital in this competitive market
You might be one of several contractors in your area, and many will be positioning themselves to get in on the action of securing a bid. Nearly all government contracts today require bonds, as do several private contracts as well. When selecting a bond broker or producer you’ll want to make sure they specialize in contract surety bonding and are familiar with construction contracts in the states you will need bonding. A good place to start is with the National Association of Surety Bond Producers (NASBP). Your broker will be able to match your company with a surety provider that best meets your bonding needs.
Securing bonds is crucial, since a contractor could easily end up defaulting on a project due to material shortages, weather, or other issues that can cause delays or even force a complete work stoppage, all of which greatly impacts your credit. Or, if you’re new to the business, and don’t have quite the history needed, this will make it more difficult to get those larger projects.
While you may want to compete for some of the larger contracts, you might be unable to qualify for the necessary bonding. This is where having a qualified agent comes in handy. By going over the specifics of what you need to qualify and, in turn compete, a reputable agency can help to determine how to secure the proper bonds that are the right fit for your business.
Enlist an agent that can help you to submit the required forms. You’ll need to include information about your personal and business financial status, bank information, and business plan. With the right agency in your corner, securing surety bonds can be an easier process than you might believe.