Tips To Improve Your Chances Of Qualifying For A Construction Surety Bond
In order for a construction company to become bonded, there is a very good reason to know what it is that is required for the same. In as much as it is such an important step, it is certainly is not your only step to mind however important. Alongside this step, there are other quite other essential features and points to consider for the acquisition of the surety bonds. All your documents will mean little or nothing if you fail to provide the necessary proof of experience and attributes to document. As a first step, you will need to have your financial house put in order. You must have the right and needful collateral to show that you have your funds in proper control.
A well-qualified construction surety bonds should also provide enough proof of having built a sound financial base with adequate reserves for cash and with very low debt levels, not huge enough to impact their liquidity. Certainly a verification of your credit status will be performed and as such you will need to clear any issues of credit and bad debt which may be staining your credit reports.
According to the size of the project to be undertaken, you will be required to provide any of the three common types of financial reports to the awards of the bonding status. These are the financial statements such as; a compilation prepared your Certified Public Accountants for projects valued below the $1 million figure, a reviewed statement from the same professionals for projects over the $1 million and a full audit report for the very large projects.
The other requirement for the application for construction surety bonds, is a sure list of references which ideally should include more than just former clients you’ve dealt with. The suppliers and other industry members will often highlight certain characteristics and qualities about your company which will be of great value to the bonding agencies in analyzing your particular company in this industry.
It is important that you ensure that all through the process you work with a surety professional. These professionals will quite help with the details of the explanations to the bonding requirements and with these you will be able to have the best effort in so far as the application for the construction surety bond goes.
The procedure for the application for the construction surety bonds is just that which we have seen above like having your documentations ahead of time, getting the financial statements ready as well, and ensuring that you have the input of the professional surety practioners.