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Experts that have EXPERIENCE on how to get you a fast approval.
Our RELATIONSHIPS allow us to get you approved at the least possible expense – KNOWLEDGE borne of years of hard work. We KNOW the formulas used by the big and small surety companies and utilize that to YOUR advantage.
We work WITH you so that you get the right deal. You will only pay the lowest cost possible for the rate you are eligible. We work with the surety company so that you will only have to post the smallest reserve amount on your bond guarantee that you are required to provide.
We don’t do bail, license and permit, court, probate, individual fidelity, or other miscellaneous bonds. We FOCUS solely on contract bonds (bid, performance, payment and other commercial surety bonds).
We are a PARTNER in the truest sense of the word. We help you determine what you need and then work with you to get it done. We are consistently helping our partners re-cast their financials so that they better match what the commercial surety company needs for underwriting. We work with you and your financial team to find the best commercial guaranty, come to the absolute best decision for your small business and then work to implement it.
We have TONS of information on our site. Below is just a quick overview of what we offer for the general contractor or small business.
Most guarantees are needed for the construction industry (either for the general contractor or small business subcontractor). In a typical building bid scenario, a contract surety guarantee may be required to provide assurance to the owner that whoever is being guaranteed will actually do what they say that they are going to do (per the terms of the contract). Usually, this is a performance guarantee, which provides that the general contractor will perform their job in a satisfactory manner. The other major type is a payment guarantee, where the payments are guaranteed by the surety company, whether to a subcontractor or a material supplier. Most commercial surety companies are a large insurance company, but it is possible to get a corporate surety that is willing to back a bond guarantee (usually in overseas situations).
Quick Tip: Any contract by the federal government over $100,000 requires a guarantee of a contractor’s satisfactory performance (this is called the Miller Act; many local governments have passed their own legislation known as Little Miller Acts).
Another Tip for your small business: It is a great idea to have a bond required as part of the bidding process for most building projects. Once you have your bond and have plenty of bonding capacity, you have a leg up on the competition. Thus, talk with the building bid supervisor and have this be something everyone is required to provide; you’ll lose some competition (usually the low-end bidders) this way. If everyone is required to post a guaranty from a surety, then the rate that you will pay will be built into the bid. This also guarantees an honest accounting from each contractor that bids, so you know that your competitors aren’t improperly bidding and each general contractor is on the same playing field. Remember, bonds protect you from unscrupulous competitors.
The beginnings of the fidelity (commercial surety) business started in London in 1720. The start of contractual law dates all the back to the Code of Hammurabi in 1700 B.C.
Since 1893, anybody wanting to work with the Federal Government on a public works projects must get a bond to guarantee the performance of the agreement as well as payment of all suppliers and subcontractors. This requirement is known in the industry as the Miller Act.
Nearly every state, plus all territories and the District of Columbia have passed similar laws known as “Little Miller Acts.”
The requirement for a guaranty by a surety has increased by 35% in recent years in private construction contracts even though the number of overall contracts have decreased by 24%.
Although generally considered similar to a policy written by an insurance company, commercial surety is not the same thing. Instead, it is a guarantee and is not designed to cover potential losses. It is akin to Private Mortgage Insurance in that the fee is not designed to be used, but instead is a fee for covering the possibility of a default (sometimes called a known unknown or a black swan event).
A commercial surety guarantee contract is based upon several factors. The rates are affected greatly by your credit rating, history and size of your company. Thus, the rate you are eligible for as a small business may be greater than a larger company in the same industry with the same credit rating and history.
The rate is based on the size of the contract. The cost for a general contractor bond is roughly 3% for smaller contracts (contracts less than $250-350,000). The rate is a sliding scale that ranges, on larger commercial contracts, from 0.75%-3%. Sometimes, you are required to provide collateral for a bond, but we work diligently to keep that from occurring. We believe that your small business (whether a general contractor or subcontractor) deserves the best rate you are eligible for. We work with you to increase bonding capacity and try to eliminate any collateral that the owner says you are required to provide for the work. A bond guarantee should be just that, a guarantee from an insurance company that you will perform, but not a way to decrease your ongoing capacity for other work.