Learn Why Surety Bonding Support Is Important For Contractors, And How To Get It.
Some contractors try to avoid bonded jobs, with the following methods:
- Only bidding where bonding is not required.
- Bidding under prime contractor’s bond
- Advocating for bond waivers
- Advocating for alternative insurance/guarantee products
Unfortunately that makes it much harder to win large project bids and grow your business as quickly as with bonded jobs. With 25 years in the surety industry working with countless contractors across the nation to help expand their project capacity, I present the top five reasons contractors should find a knowledgeable surety agency to gain surety bonding support:
1. Public Works budgets of future construction contracts. As the construction of roads and bridges continues from 2015, 2016 has a good chance at growth, generated by both environmental and pending multi-year transportation bills for public work projects in, through and beyond 2016. Future infrastructure investment is already in a number of budgets federally, in states and locally, across the country. Numerous states, counties, cities and school districts have sold or are selling investment bonds for building and improving much needed school campuses and infrastructure improvement. Population growth for states, cities and counties have pushed demand for improved and new park recreation sites. All this means more opportunity to bid work with surety support.
2. Balance out private work cycles. As we continue in the very slow economy growth cycle, private spending in the residential and business sector can be undependable. There are many pockets of strong movement, yet other areas are seeing projects delayed or taken off line. Looking for local public projects can help fill in those dips from private work.
3. Increased demand for surety bonds on private work. With slow economic growth, funding of private works has been cautious. Many lenders now require the private owners to have their contractors provide Performance Bonds and Payment Bonds. This trend carries up though most of Corporate America, where businesses are more frequently protecting their building fund accounts by requiring surety bonds from their contractors.
4. The more experience you establish with a surety the easier it gets to go after those large, profitable jobs that have less competition. It is not a cliché; having a track record with a surety on bidding, winning, working and completing smaller jobs successfully and profitably does make a difference when that perfect large jobs comes down the pipe. A surety is more willing to stretch their underwriting program for an account that they know and with whom they have built a history.
5. Establishing a relationship with a profession surety agent provides an outside consultant with seasoned knowledge on how to successfully build a construction business. Your experienced surety agent is a free source of knowledge for you to use. Take advantage of them. Your surety agent has seen and worked with many similar contract accounts and has a wealth of knowledge and experience in the good, the bad and the ugly. Your professional surety agent has on call a variety of resources on all facets of construction contracts. Your surety agents only goal is for your firm to be and continue to be successful.
Convinced yet? If you have any reservations, feel free to give me or my contract bonding team a call at 1-800-361-1720 so we can answer any other questions. We can provide you the tools and information needed to attain a surety bond line of credit. Or you can Google “(Your Location) Surety Agency” to find someone near you to start the conversation. They will talk with you about your business, your future goals, current projects, and then take you through the pre-approval process to establish a bonding line.
We want you to succeed and grow your business year over year. Thanks for reading, keep checking in with our blog for more contractor business guides and information.
South Coast Surety