A contract bond is an agreement between two parties that want a job done. One party wants the contract to be done and the other wants to do the work so he or she can get paid for what services they have performed.
When you have a contract bond that usually means that they have both agreed they will use a funds controller. The funds controller is a go between the owner of the contract and the contractor who is doing the business.
The funds manager is really there to protect the owner of the contract even though the contractor has to pay for the bond. The reason that the owner wants the fund controller is because the contractor has had some ruff times and he wants to make sure that the job can be finished.
The contract bond is use as security for the contractor so that he can get the bond. The owner of the contract agrees to pay the fund controller. The funds controller then pays all the bills and material cost. With this type of control over the contract then both parties feel that they can get the job done in a timely matter. Once again it protects the owner of the contract. It also show that the owner of the contract is acting in good faith to make sure that all monies are there to draw upon.
When we have a contract bond we have a lot of ways that we can get a bond for a contractor. Since we are using the contract as security and the owner of the contract agrees to pay us directly, this give us many ways to fund the bond for the contractor.
Example, if we ask the contract owner for an advance on the contract we can get operation money to fund the project without having to borrower the working capital. Some of the contract owners will do that and some say the the contractor must fund his operation. We can go to other companies and help you get funding with the contract on account receivables. The job of the alternative bonding company is to help you get the funds that you need and get the bond approved by the owner of the contract so he can do what her does best. Do The Job!
Since the contract is being used as security we sometimes can go to the suppliers and get terms to pay them so that the contractor does not have to us his working capital for material and supplies but he can pay labor cost and general expenses.
If you need help in finding a construction bonding company then you need to call Ric Cline at 719-588-3601 or toll free 1-800-772-9904 at any time and he will work for you to get what you need.
This is the only site I could find to help me with my Contractors Bonds. I know I am a new business, but appreciate not being treated like one.