Enhance Your Contractor Customers’ FastBond to a Regular Bond Program

This submit is part of a sequence sponsored by Outdated Republic Surety.

Your contractor purchasers instantly have additional alternate options to work on higher-value initiatives in every the non-public and non-private sectors. Consistent with an enterprise outlook report by the Associated General Contractors of America, in 2024, contractors anticipate demand for growth initiatives in 14 out of the 17 growth lessons surveyed to increase in 2024. Various the sectors with the most important anticipated growth embody sewer and water, freeway and bridge, federal initiatives, vitality initiatives and healthcare companies.

This can be a excellent time for you and your contractor purchasers to debate actions and methods that will help them qualify for elevated bonding functionality.

Many smaller or newer-in-business contractors purchase bonds on smaller sized initiatives by means of abbreviated underwriting functions similar to Outdated Republic Surety Agency’s FastBond program to get the needed bonds for these contracts. FastBond streamlines the underwriting course of, is primarily credit-based, and doesn’t require the extent of financial and totally different underwriting data needed to qualify for the usual bond program for larger contracts.

Causes to enhance a contractor’s bonding functionality

Let’s check out why your contractor purchasers must ponder shifting from a FastBond-type program to a standard contract bond program and the way in which they are going to accomplish that.

• The contractor needs to develop and enhance earnings Altering to a standard bond program opens up alternate options for larger and additional quite a few contracts. Rivals is proscribed on many larger contracts, serving to to elevate the chance of elevated earnings.
• The value of the bond itself. FastBond functions are designed for a contractor that has occasional bond desires, and FastBonds are normally charged bigger fees. Outdated Republic Surety writes FastBonds that will go as extreme as $2 million combination, usually at a $20 to $30/thousand value. Regular program fees are lower, enabling the contractor to tender additional aggressive bids and presumably earn increased margins on their work.

5 steps to transition from a FastBond program to a standard program

Regular bond functions require additional refined financial data and value methods. Contractors can enhance their bonding functionality with a standard bond program by following these 5 steps:

1. Sort a partnership alongside together with your key financial advisors. These embody educated surety agent, a construction-oriented CPA, a monetary establishment that understands growth lending and, in truth, your surety underwriter.
2. Enhance the usual of your financial assertion presentation. CPA-prepared financials add credibility to the information you current. A CPA, ideally a construction-oriented CPA, understands the importance of strong internal worth methods and will current the percentage-of-completion format most well liked by sureties. CPAs will provide help to in presenting your financial profile in the easiest delicate. Additional earnings earned and money saved by altering to a standard surety program must better than pay for the additional costs {{of professional}} CPA suppliers.
3. Develop working capital and firm net worth. Make the dedication to assemble up your steadiness sheet to help your required program by forgoing big bonuses or pointless gear purchases. As quickly as the stableness sheet helps your program, surplus capital can be withdrawn as desired. This reveals that you just’re ready to do what it takes now to make your group worthwhile in the long term.
4. Current proof of internal controls. Robust methods that observe job costs, deal with the gathering of receivables, current for the speedy price of funds when due, lower surplus inventory, and enhance employee effectivity are all important to the success of your group. The subsequent most interesting practices will contribute to improved bottom-line profitability:

• Unannounced job site inspections
• The utilization of authorised contract varieties
• Appropriate documentation of change orders
• Proof of insurance coverage protection for all subcontractors
• Security of property similar to gear and provides
• Written safety insurance coverage insurance policies to attenuate job site hazards
• Incentives that reward workers for bottom-line income

5. Current particulars in regards to the job to be carried out. The additional detailed data it’s possible you’ll current the surety referring to the job you want to bid and the way in which your experience and capabilities qualify you to effectively perform it, the additional assured the surety may be in providing the bond. Furthermore, your willingness to fulfill underwriting requirements will drastically improve your chance of buying elevated surety help.

Outdated Republic Surety Agency prides itself on taking a consultative methodology with contractors which may be ready to adjust to the needed steps to increase their bonding functionality. We offers you the advice it’s essential to take your bonding program to the following stage. Contact your bond agent for additional data, or contact us so we’ll be part of you with the best bond producers throughout the enterprise.

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