Small Business and Surety Bonds

The Ways Surety Can Help You With Your Business

New small business owners often find themselves having to acquire a surety bond for the very first time. They often discover that getting a bond can be difficult. What they should take from the process is that surety both provides input on what is best for your business as well as providing information that can strengthen your business skills.

 1.  Your credit and financial records are important

            When you apply for a surety bond, the surety supplier helping you with your surety bond needs investigates your credit history, your experience in this line of work and the working capital and net worth that you have to support your business in order to determine the risk and rate for your bond. For those, even new companies, with good credit, cash and net worth, the cost for your needed surety bonds are relatively small. When you have had credit challenges and do not bring a strong financial profile to the table, getting qualified for a surety bond will be both difficult and expensive.

 2. Required bonding adds value to your industry’s standards

            The professions that have established licensing and bonding requirements are declaring to the public that they necessitate the members of their vocation to meet certain standards. Likewise, owners of projects (Obligees) rely upon the surety underwriting process to qualify the businesses they contract with. These obligees, usually public entities as well as some private owners know that the surety has reviewed both the financial as well as professional capabilities of their clients for whom they are providing surety support. Having a surety saying that they believe you are qualified for the job means a lot to your customers.

 3. Surety requires you to be responsible for your work

            A surety bond tells your customers that what you say is what you will do. The surety expects you to handle your business with the highest level of trust and reliability. If you have a problem, make a mistake or have some other error, the surety expects you to make it right. Your customers know that sureties only support businesses with strong principled work ethics and practices.   

  4. Being bonded puts you above your unbonded competition

            Your customers and clients know that getting bonded is not easy. They know that you had to take many steps to qualify for bond support. This sets you apart from other companies that either have not or cannot get surety bond support. Letting your customers know you are bonded can help drive business through your doors.

 5. Your Surety Agent is a free source of best business practices

            Surety agents deal with many similar businesses that have similar issues. They can help and provide advice on the best way to handle many business matters. Your surety agent can work with your accountant and attorney to see that you present the best picture of your business for the best possible surety bond support. Your surety agent is there to both help and protect you in reviewing contract terms and conditions. Your surety agent is the one you should share all concerns and problems with, so they can suggest the best solution.

 6. The Bottom Line – your customers know the surety has you covered

            When the surety has executed a contract bond, it guarantees that you will get the work done as agreed and that all subcontractors, suppliers and employees with be properly paid. If for any reason some or all of the above does not happen, then the surety can step in to make things right. The surety will also be there to help with issues when your customer’s complaint is out of line.

The best thing to know is that in the world of surety, your surety is a participating partner in your business. The surety is there to add support to help you grow and attain the level of business that you are striving to reach