Tips To Improve Your Chances Of Qualifying For A Construction Surety Bond
In order for a construction company to become bonded, there is a very good reason to know what it is that is required for the same. It however is not the all important step in the process though very necessary. There are other important factors that you will need to give consideration as well. Your documentations and paperwork may be of little significance if you do not have the qualifying attributes and experience to custom bond. The number one consideration for the process concerning you will be the need to have your financial house put in order. You will need to provide the due documentation which will be a proof that your funds controls are right and you have no excesses in so far as your needs for adequate reserves to run the custom bond is threatened.
The company applying for the construction surety bonds should also provide enough evidence to show that they have with them the required levels of liquidity all dependent on the level of debt they have and the cash reserves they have to run the business. Certainly a verification of your credit status will be performed and as such you will need to clear any issues of credit and bad debt which may be staining your credit reports.
As the size of the project goes, there will be need on you to provide any of the three types of financial reports before you are awarded or qualified for bonding. Some of the statements include a compilation prepared by your CPA for projects falling below the 1 million dollar value, a reviewed statement from the CPA’s for those above the 1 million dollar figure and for the very large value figures, you will need to have a full audit report.
The application for construction bonds will call on you to provide a list of references like that from customers dealt with in the past though it should ideally go beyond this particular sphere. The bonding agencies will be dependent on the other bits of information which will be found from the other members of the construction industry like the suppliers whose information will as well be used to gauge your company’s standing in the industry and for bonding purposes.
It is important that thoughout the process, you get to work with a surety professional. The surety professionals will be helpful to you in so far as the details of explanations for the surety application goes and with the tips they will give you can give the application for these a far much better shot.
As such the basics for the application of the construction bonds remains the same; get your docs ready ahead of time, have a review of your financial statements, then have reasonable collateral and finally ensure to work with a surety professional all through.