subject: What A Surety Bond Company Looks For [print this page] Construction companies seeking a surety bond for their operations will find that surety bonds are most often obtained from professional surety bond producers who represent surety companies. A fairly rigorous qualification process (called underwriting) must be completed to obtain a surety bond, although some programs offer a simpler qualification process for smaller contractor operations with smaller bond needs. Whether the business is large or small, here are a number of things that a surety bond company will want to see in order to get a good sense of the construction companys overall well-being and help pinpoint the contractors surety capacity:
Financial statements (in some cases, prepared by a CPA), which prove in black and white (or red) whether the contractor has a history of running a solid, profitable business and has sufficient financial backing necessary to support the work at hand
A business plan, which sheds additional light on whether the business is well managed and is positioned to handle present and future obligations
Positive references and letters of recommendation, which support the contractors solid reputation
Employees whose experience and skills sets echo what is required in the contract
Equipment and supplies necessary to perform the work, or the ability to secure those items
Work with a professional
A professional surety bond producer serves as a liaison between the contractor and the surety bond provider, and can be of immense help to contractors wanting to simplify the bonding process. Here are just a few ways the surety bond producer, with his or her intimate understanding of the surety bonding process as well as the construction industry, provides value:
Educates the contractor about surety bond underwriting practices, requirements, and other standards for the surety bond industry
Knows the requirements of the individual surety company that is best suited to meet the needs of the contractor
Establishes access to helpful support administrative professionals such as accountants, attorneys, and financial institution representatives who are experienced in working with members of the construction industry
Looking to establish surety credit?
A professional surety bond producer works to establish and maintain a trusted team relationship between the surety company and the contractor, as well as oversee surety capacity. For help in navigating the complicated landscape of surety bond providers as well as gaining business advice that will support growth and profitability, its best to work with a professional surety bond producer.
