Last week we blogged about how to increase bonding as a small business (click here for the blog), but we received some calls from businesses that are either new, or new to bonding, who want to know how to simply get a minimum bond line established. Here is a step by step process for the new business to get performance and payment bonding credit established.
Complete a credit based application for bond limits up to $350,000. Click Here for the application. For brand new businesses you likely will not qualify for $350,000 but if you have good credit, you will qualify for something.
I was approved. Now that you are prequalified, you should complete a personal financial statement and provide a current business financial statement to increase your aggregate level of bonding.
I was declined. Call Surety 1 at 877-654-2327 and inquire about the Small Business Administration bond program.
If all went well, you have a single bonding limit and an aggregate bonding limit. From here work with your bond agent on the next step. Providing additional documents such as resumes of owners and key employees, business plan, prior year financial statements, work in progress reports, bank statements to verify cash, aging reports, tax returns, etc. will give your bond agent a complete picture of your company
Obtaining surety bond credit to able to obtain bid bonds, performance bonds, and payment bonds is the first step to entering into the public arena. Any contractor that is either a new business or new to public works should be prepared for what it entails. It is a different animal than private works construction. Bonding is just one component. Now that you are prequalified, attend local workshops and do the rest of your homework before pursuing public works projects.