It is not uncommon for businesses, and particularly those in the construction field, to need some form of surety bond in order to receive government and other contracts. Here are three important things you need to understand about bonds:
1. It’s important to understand what bonding companies look for
Bonding requirements can be just as stringent, and sometimes even more so, as those you will face when seeking a business loan. After all, a bond is a guarantee that you will reliably meet and satisfactorily perform all expectations of a contract. The more you understand what bonding companies look for when considering a bond request, the better prepared you will be. Among other things, bond companies look for:
- How long you have been in business
- How you have managed business growth
- Your financial ability, including the quality of your financial and other records
- The relationship you have with your business banker
- Your personal credit
2. There are Resources that can help you prepare for a bond
The more prepared you are to apply for a bond the better positioned you will be for success. The good news is that there are resources that can help you prepare!
Sitting down and taking a really hard look at your internal operations and business plan, and making sure you have a really good grasp of your financial position and reports, is critical to improving your ability to secure a bond. After all, you’re asking a bonding company to take a risk that you will perform satisfactorily on your contract. The more you can demonstrate your ability to perform, the more likely your success will be. Seeking professional advice can help you better position your business for success in qualifying for a bond. Several of the best FREE resources in Charlotte to help you with this are the one-on-one business counseling services at CPCC’s Institute for Entrepreneurship, the SBTDC, and SCORE.
There are a number of contractor associations in the Charlotte region that not only provide training on a wide variety of topics of interest to the construction industry, but also provide networking opportunities and more.
CMSDC seeks to expand business opportunities for Minority Business Enterprises (MBEs) and create mutually beneficial links between Corporate Members and MBEs. The ultimate outcome is to add economic value to the supply chain, while increasing economic opportunities for the minority business community.
3. The SBA has a Bond Guaranty Program that can help
Learn about the SBA’s Surety Bond Guarantee Program and find participating insurance companies.
Learn more about the basics of bonding, how to obtain a surety bond, what The Miller Act means to you, and much more.
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