We can help you get the Construction Performance bond you need.
Most contractors need some type of bonding from time to time. It always seems when you need a bond it is the worse time. You had a bad year or you have over spent in the day to day operation of your business. You just do not have the resources to get the bond you need.
Most bonding companies want you to have 10 times working capital before they will even talk to you. There are other options for bonding.
You can do an individual performance and payment bond with someone who would trust you to get the job done. This is very unusual and does not happen very often. The best alternative to bonding is some type of funds control.
Most contractor performance bonds have three parts to them -
1. You must furnish a bid bond at the time of the bid opening. This tells the owner of the contract that you have the means to get the performance and payment bond.
2. The performance bond also tells the owner of the contract that you have someone else that will finish the job if you cannot get it done.
3. Finally the third is the payment bond which makes sure that all the suppliers, material costs and laborers will be paid.
A bid bond is required at the time of bid opening and usually needs to be somewhere in the range of 5% to 20% of the job amount. The bid bond can be a cashiers check for the full amount of the bid requirement or It could be a letter of credit from a national or state bank that is insured by FDIC. The easiest way is to have a bid bond from the company that is going to issue the performance and payment bond if you are awarded the contract for being the lowest bidder.
The performance bond is the main structure of the bond, which tells the owner of the contract that if you are not able to perform the job that the bonding company will step in and find someone to finish the job or do it themselves.
A payment bond is a companion of the performance bond and is issued at the same time as the performance bond. They are different instruments, but are both guarantees of some type of payment to the owner the contract. The payment bond is telling the project manger that the suppliers and all materials will be paid for by someone if the contractor does not fulfill this obligation.
Bonds in general are a financial guarantee to someone that if the job is not done then somone e will make the contract owner whole. Since it is a guarantee then most standard companies want to take everything that you have as security and tie up all your working capital. This makes it impossible to get the job done right.There are other alternatives for bonding available to you. If you have questions about other bonding options please call today.
I have been looking for a source Contractors Bonds for a long time. If you are like me, I just cant get my foot in the door with out a bond, especiall the big jobs. Now that I have the access to high dollar bond options, I am able to go after some of the more profitable projects. So THANKS for your help!