Surety bonds are something that businesses need to get within certain industries. However, if you are starting out you might be daunted by the prospect of getting these bonds. There are a number of tips that you should consider when you look at these bonds as they can help you obtain the right surety bonds for your business.
Select A Reputable Bond Broker And Surety Company
When you look at your surety bond broker you need to ensure that they are reputable. Ideally, you will also want to find a broker that is knowledge in your industry as they will be able to help you find the right surety bonds. A good place to start looking for the broker is through the National Association of Surety Bond Providers or NASBP.
A reputable broker will be able to match your business with a provider that is able to meet your needs. It is important that you also ensure that any broker you hire works with reputable surety companies. The surety company that you use needs to be certified by the US Department of Treasury which allows them to write surety bonds. Before you agree with any surety company that your broker suggest you should do some research on them and site like HCG Law Magazine to ensure that they are reputable.
Going through the pre-qualification process is something that you should do before you complete any tasks that would require you to have a surety bond. This allows you to determine if you are able to get a surety bond and to determine what the bonding capacity may be. The information required by the surety company may vary depending on the history of your business.
However, most surety companies will require financial statements for your company along with your personal financial statements and those of any co-owners. The company may also ask for your business plan, management plans, continuity plans and the organizational charts. All of this information will then be used to determine whether or not you are eligible for a bond and what the capacity may be.
Build A Relationship With The Broker
Your broker is going to be your ally and advocate when it comes to surety bonds. It is important that you have open communication with them and the surety company that you choose. It is important that you always notify your broker if there are any problems with your business. Any changes to your business also need to be communicated to the broker so they can ensure that you are always on the right surety bond agreement.
Maintain A Healthy Business
If you want to grow your bonding capacity or ensure that you actually get a surety bond you need to maintain a healthy business. If your business is not sustainable then you are unlike to get a surety bond. If you do then the premiums for the bond will be very high because the surety company considers you a risk. Keeping your business healthy may mean not taking on new contracts if you do not have the work capacity for them even if the payment would be good.