Creating A Beautiful Financial Future

« Back to Home

3 Things You Need To Know About Getting A Surety Bond

Posted on

As a construction company, when you do a big job, the company that your job is for more than likely going to want you to secure a surety bond to back up the work that you are going to do for them.

#1 You Can Get A Surety Bond From A Licensed Agency

There are particular agencies or companies that are licensed to provide contractors and other businesses with surety bonds. Theses bonding companies usually specialize specifically helping people obtain different types of bonds for their business. They are generally really knowledgably about the types of bonds and the particular requirements your bond has to meet for your industry.

These agencies are licensed by your state. You can call your state to check and make sure that the surety business you want to work with is a licensed agency.

#2 You Have To Go Through An Application Process

In order to get a surety bond, you are going to have to go through an application process. If you have all of your information together, the application process can be really quick.

The surety bond company is going to need to know information about your company's background as well as the job you are planning on working on. You will need to provide them with proof of income. You will need to show them that your business has the cash flow necessary to complete the project you are bidding on. You may also need to submit information about the bid or job your company wants to work on.

#3 Your Credit History Will Affect The Fees You Pay

The fees that you pay for depend upon your credit history. If you are a small company, the fees will be based upon your individual credit score. If you are a larger or more established company, the fees will be based upon the credit score of your company.

In addition to your credit score, the credit agency will examine your work history and other financial information to determine the rate that you will have to pay for the surety bond. The better your credit score and cash flow, the better the interest rate you will be able to secure.

If you have a low credit score, you are going to be charged a significantly higher fee in order to secure a surety bond. That means that you are going to need to have a higher cash flow so you can afford to pay the larger fee needed to secure a security bond. For more information, contact companies like Surety Bond Professionals.