Unlock Bigger Projects in Lincoln, Nebraska with a Performance Bond
From our perspective, securing a performance bond is one of the most important steps a contractor can take to win contracts and build credibility in Lincoln, Nebraska. Public projects, and many private developments, require these bonds to guarantee that work will be completed as agreed. Yet, many contractors struggle with the process, unsure of the requirements, costs, or approval criteria.
Understanding how to secure a performance bond quickly and efficiently can make the difference between landing a project and losing out to the competition. With the right guidance, contractors can move forward confidently, knowing they have the financial backing to meet project obligations.
Why Lincoln, Nebraska Contractors Can’t Afford to Overlook Performance Bonds
A performance bond is more than just a requirement—it is a contractor’s stamp of reliability. This bond provides a guarantee that work will be completed according to contract terms. If the contractor does not fulfill the agreement, the surety either pays the project owner for losses or steps in to ensure completion.
We’ve noticed that many contractors assume performance bonds apply only to large-scale projects or government contracts. In reality, they are increasingly used in private construction, particularly in commercial and high-value residential developments.
Taking a look at performance and payment bonds together provides a clearer understanding of how contractors are expected to meet both completion and financial obligations. While a performance bond ensures that a project is completed, a payment bond guarantees that subcontractors and suppliers receive payment.
Who Needs a Performance Bond in Lincoln, NE? Check Below:
| Type of Project | Performance Bond Requirement | Governing Law |
|---|---|---|
| Public Works (State and City Projects) | Required | Nebraska’s Little Miller Act (Neb. Rev. Stat. § 52-118) |
| Private Construction (Commercial and Residential) | Sometimes | Based on project owner’s terms |
| Subcontractor Work | Often | General contractors may require it |
Based on our experience, contractors working on public projects in Lincoln need a 100 percent performance bond before they can begin work. Private developers may have different requirements, but many insist on bonds to reduce risk.
Debunking Myths: What Contractors Get Wrong About Performance Bonds in Lincoln, Nebraska
We’ve noticed that many contractors hesitate when they hear “performance bond” because of common misconceptions. Let’s set the record straight.
“A Performance Bond is Just Like Insurance”
We’ve noticed that many contractors believe performance bonds function like insurance. However, a performance bond does not absorb financial losses. Instead, it holds the contractor accountable. If a claim is made, the contractor must repay the surety for any payouts.
“Only Large Contractors Can Qualify for Performance Bonds”
We’ve noticed that smaller contractors often assume they are not eligible for bonding. In reality, even small and mid-sized contractors can get bonded. Financial history, past work performance, and business strength play a role in approval.
“If My Credit is Good, I’m Guaranteed a Bond”
We’ve noticed that many contractors think good credit automatically qualifies them for a performance bond. While credit matters, sureties evaluate more than credit scores. They look at:
- Business financial statements
- Cash flow and liquidity
- Project history and references
We’ve found that contractors who prepare strong financials and work with a knowledgeable bond provider have higher approval chances.
Fast-Track Your Bond Approval with This Five-Step Process in Lincoln, Nebraska
What we’ve discovered is that many contractors face unnecessary delays when applying for a performance bond simply because they do not have the right documents or wait too long to apply. Follow these steps to avoid setbacks and secure your bond fast.
Step One: Confirm the Exact Bond Requirements for Your Project
- Review contract documents and Nebraska law to determine bond percentage.
- For public projects, Nebraska requires a 100 percent performance bond.
- Private projects may have negotiable bond terms, so it is best to clarify early.
Step Two: Gather the Financial Documents Lenders Need
Sureties assess financial strength to determine risk. Have these ready.
- Business financials (balance sheet, income statement, cash flow)
- Personal financials (for small business owners)
- Credit reports (business and personal, if applicable)
- List of completed projects and references
Step Three: Apply Through a Reputable Surety Bond Provider
Based on our experience, applying through an expert bond provider like Swiftbonds simplifies the process and prevents common application mistakes.
Step Four: Get Underwriting Approval and Review Your Bond Quote
Sureties evaluate:
- Creditworthiness and cash flow. Stronger financials mean lower bond costs.
- Project size and risk level. Large projects require deeper underwriting.
- Past performance. Contractors with a strong track record get better rates.
Step Five: Secure the Bond and Submit It Before Deadlines
We’ve found that contractors who secure their bonds early have a competitive advantage. Missing a bond submission deadline can result in losing the contract.
See our Performance Bonds in Omaha, Nebraska page
Waiting Costs You Contracts in Lincoln, Nebraska: Why You Need a Bond Now
In our observation, many contractors wait too long to secure a performance bond. This leads to unnecessary stress, higher costs, and sometimes lost contracts.
| Risk | What It Means for Your Business |
|---|---|
| Missed Bid Deadlines | Another contractor wins the contract. |
| Higher Bond Costs | Last-minute underwriting often means higher rates. |
| Project Delays | Delays in bonding push back your project timeline. |
We’ve found that taking action early helps contractors avoid unnecessary financial stress and keeps projects on schedule.
What Happens If a Performance Bond Claim Is Filed Against You?
We’ve learned that performance bond claims occur when contractors fail to complete a project as promised. The process works as follows.
- The surety investigates to determine if the contractor defaulted.
- If the claim is valid, the surety takes action by either:
- Hiring another contractor to finish the work.
- Compensating the project owner for losses.
- The contractor is responsible for reimbursing the surety for any costs.
Preventing claims is key. Strong project management and meeting contract deadlines significantly reduce the risk of disputes.
Nebraska's Performance Bond Statutes: Ensuring Project Completion
In Nebraska, performance bonds are mandated by state law to ensure the faithful execution of construction projects, particularly those involving public entities. According to Nebraska Revised Statute § 52-118, any contractor entering into a contract exceeding $10,000 with the state or its subdivisions must furnish a performance bond. This bond serves as a financial guarantee that the contractor will complete the project per the agreed terms.
Key Provisions of Nebraska's Performance Bond Requirements:
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Obligation: The bond ensures payment to all laborers, mechanics, and suppliers involved in the project.nebraskalegislature.gov
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Amount: The required bond amount must be at least 50% of the contract price for contracts up to $1 million. For contracts between $1 million and $5 million, the bond must be 40% of the contract price. Contracts exceeding $5 million require a bond of $2.5 million. nebraskalegislature.gov
- Claims Process: Subcontractors and suppliers must provide written notice of any claims to the prime contractor within 90 days after their last labor or material contribution. Legal action against the surety must commence within one year of the claimant's last performance.
These statutes aim to protect public entities and ensure that all parties contributing to public projects receive due compensation.
Lincoln's Specific Bonding Requirements for Contractors
In addition to state mandates, the City of Lincoln enforces its own bonding regulations to uphold the integrity of local construction projects. The Lincoln Municipal Code specifies that contractors must obtain a compliance bond of $5,000 before commencing work.
Lincoln's Bonding Requirements Include:
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License and Permit Bond: Contractors must secure a $5,000 bond or provide a cashier's check of the same amount payable to the City of Lincoln. lincoln.ne.gov
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Execution: If the bond isn't signed by a surety company's officer, an attached Power of Attorney form is required.lincoln.ne.gov
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Duration: The bond should be a one-year renewable bond with clear start and end dates.lincoln.ne.gov
These measures ensure that contractors adhere to local standards, safeguarding the city's infrastructure and its residents.
Top Questions About Performance Bonds in Lincoln, Nebraska
How much does a performance bond cost in Lincoln?
We’ve often noticed that bond premiums typically range from one percent to three percent of the contract value, depending on the contractor’s financial strength and project risk.
Can a new contractor get a performance bond?
We’ve found that even new businesses can qualify by providing strong financials, industry experience, or securing a co-signer.
What happens if I do not secure a performance bond on time?
We’ve noticed that contractors who delay bonding risk losing contracts, missing deadlines, and paying higher premiums due to rushed underwriting.
Are performance bonds required for private construction projects in Lincoln?
We’ve often seen that while not always required, many private developers demand performance bonds to protect their investment.
Get Ahead of the Competition in Lincoln, Nebraska—Secure Your Performance Bond Today
We’ve come to appreciate that Lincoln’s contractors thrive when they take control of their bonding process. With Swiftbonds, you get:
- Fast approvals with streamlined applications and expert guidance.
- Affordable rates with competitive pricing based on financial strength.
- Reliable service from a trusted partner for Nebraska contractors.
Do not wait—request your performance bond quote today.
See our Performance Bonds in Bellevue, Nebraska page
Swiftbonds: Trusted Partner for Nebraska Contractors
Swiftbonds has established a strong reputation across Nebraska for its expertise in bonding services. Contractors statewide commend Swiftbonds for their professionalism, prompt service, and comprehensive understanding of both state and local bonding requirements.
Client Testimonial:
"Working with Swiftbonds, specifically Craig Regan, has been an absolute delight. He is fast, professional, helpful, and courteous. A joy to work with!"
By partnering with Swiftbonds, contractors in Lincoln can navigate the complexities of performance bond requirements with confidence, ensuring compliance and fostering trust in their professional endeavors.