The Latest Blogs & News

Sep

Grow Your Construction Business by Establishing (or Improving) Your Bond Program

It’s easy to tell your customers that you will fulfill your contractual obligations. It’s also easy to tell them that you are trustworthy. But how about…

the solid assurance of a corporate surety’s guarantee that your work will be performed in a timely manner and your bills will be paid?

Backed by a Company with a Financial Interest

When your company is bonded, you are showing potential clients that you are worthy of the performance and payment guarantees of a surety company. It demonstrates not only that your business is worth backing, but that you proved to expert underwriters that you have:

The experience and ability to successfully complete the customer’s contract
Adequate finances & equipment
An indication of good character

Surety bonds create added comfort for clients. Bonding shows potential clients and their lenders that you are capable of guaranteeing your contract. A bond doesn’t just make you look good, it protects your clients and lenders against the possibility that you will breach the contract.

Following Legal Guidelines

In some industries, bonding is more than a source of reassurance. It is a regulatory requirement when contracting with City, County, State and Federal owners. If you want to expand in these public areas of business, surety support is critical.

Bonds for Growth

Bonds position your business to grow revenue in both the public and private sectors; not to mention the added edge over non-bonded competitors.

Don’t just tell your customers that you can perform your contract. Show them with a bond!

For more information contact:

Zach Bradley
zach@suretyss.com
866-385-7760

Apr

Specialized Sub-Contractor Surety

Insurance agents should look beyond the general contractor when considering which clients are good prospects for surety sales. Specialized subcontractors are an even larger prospect pool since general contractors subcontract out most of the labor to many different companies.

Which subcontractors need surety?

Plumbers
Electricians
Landscapers
Roofers
Painters
Tree Services
HVAC Installers
Other finishing contractors

Subcontractors must offer the same assurance of ability to complete a job that general contractors furnish. Construction is a business that’s heavily regulated. Codes must be followed, permits obtained and inspections completed. Anyone involved in this industry that is an insurance client most likely needs surety. Our surety services take the work off your desk while making sure your clients do not seek their surety needs from another agent.

Apr

Unions Protect Members with Wage & Welfare Bonds

Unions want to make sure companies uphold union contracts. As a precaution, unions require any company that employs their members to have a surety bond in place. This bond makes sure the employer handles dues properly, pays and administers benefits, and in general honors all the terms of the union contract.

These bonds are required at the local level. Such a requirement prevents the national organization from collecting when a local union contract infraction takes place. This makes the bond unique in the fact that a local union shop will have its own formula to determine surety bond amounts. The local union will also have its own bond forms with specific requirements.

Wage and Welfare bonds are a type of financial guarantee bond. Such a bond isn’t easy to write with most surety companies. But, wage and welfare bonds are one of the few financial guarantee bonds that some sureties will consider. Our surety providers have the underwriting authority to place the bond regardless of a company’s credit or financial strength. We have the ability to quickly approve applications at very reasonable rates.

Surety Support Services provides employers with Wage & Welfare bonds so they can meet the needs of their unionized employees. Contact us today for more information . Suretyss.com.

Mar

Working Together- Contractors and Surety Agents

Contractors large and small benefit greatly when having a group of advisors that specialize in bid situations. Most advisory groups consist of CPAs, commercial bankers, lawyers, insurance agents, and surety professionals. These advisors provide years of experience in corporate organization, financial planning, and successful bonding strategies.

Surety agents are key advisors in the entire process. They understand what is expected by both the organization requiring the bond and the surety underwriters. This understanding allows your agent to help in more ways than you may expect.

A Surety Professional:

Builds a long-term strategy to increase surety capacity to the next level.
Leverages the company’s past success and profitability to help secure bids and compete for larger, more profitable jobs.
Guides companies in continued bidding efforts to retain and grow the company’s working capital and net worth.
Puts forth a financial presentation that shows successful management of bonded work.
Works with company’s CPA in generating construction accounting financial statements in a form and format preferred by the surety underwriters.

Your dedicated surety agent will work hand in hand with your staff as you conclude your present work and turn your focus towards future jobs. If your interested in winning the next level contract, give us a call at 866-385-7760.

Feb

Surety Professionals Keep an Eye on the Construction Industry

Infrastructure projects are highly sought by contractors nationwide. Industry forecasts are valuable tools for business planning and income projections. At Surety Support Services, we prepare our agents to meet the needs of their construction clients. This month we take a look at two industry reports that give great insight into 2019 construction opportunities.

Summary of Dodge Analytics 2019 Construction Forecast (Oct. 25, 2018):

In general, the construction industry should see a modest 3% growth.
The source of most government spending will be at the local level due to municipal bond initiatives.
Institutional building in 2018 showed a 1% gain, but 2019 should advance to a 3% gain.
Educational building should continue growing in 2019
Healthcare projects actually retreated in 2018 but it is expected they will rebound and show modest growth in 2019.
Transportation projects are stagnant, holding at the 2017 and 2018 levels.

Access the full report at: https://www.construction.com/news/new-construction-starts-2019-steady-with-2018-dodge-data-analytics-oct-2018

Economists’ State of the Construction Industry 2019- Summary (Feb. 11, 2019)

Bridge and highway construction rebounded in 2018 and will see a slight increase for 2019.
States are allowed to take up to four years to obligate federal funds. As a result, 2018 federal allocations to states will keep the construction pipeline flowing in 2019.
Federal allocations combined with state funds raised through new fuel taxes and tollways will mean a modest 1.5% growth in bridge and highway construction.
Commercial building is expected to see modest growth with exact projections undefined.

Access the full report at: https://www.forconstructionpros.com/business/article/21041305/special-report-state-of-the-construction-industry-2019

Get a Bond Quote at Suretyss.com.

Feb

Medicare and Medicaid Bond Changes:

New Medical Device Bond for Limited Number of Dentists

The medical device sales regulation exempted all physicians and dentist until recently. On November 28, 2018, the Centers of Medicare and Medicaid Services (CMS) added a new bond requirement for certain medical device distributors. Now Dental Sleep Medicine professionals who distribute medical devices prescribed by other physicians must obtain a $50,000 bond. These practitioners must comply within 30 days of their CMS notification letter.

Dentists had a physician’s exemption concerning the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) accreditation. Now when a dentist’s practice includes distribution of medical devices from another medical practitioner, accreditation is required.

Obtaining a DMEPOS bond is easy:

Direct your dental clients to Surety Support Services. We provide easy access to DMEPOS bonds and at a low rate. Get a quote today at http://suretyss.com/license-permit-and-misc-bonds.php

Jan

2019 Contractors Bid Bonds: Plan Ahead for New Projects

Contractors are gearing up for the 2019 construction season. They are surveying the landscape; reviewing new infrastructure projects for opportunities.

It all starts with bid bonds, and the wise contractors have a surety bond program established long before they ever start bidding public work. Why spend the time and money estimating a job if you are unable to get the necessary bid, performance and payment bonds?

Bid bonds are most closely associated with the construction of roads, utilities, bridges or public buildings. However, almost any publicly funded contract (including construction & non-construction) requires bonding, so there’s a seemingly endless list of business trades that need bonds. Once the bid is won, the contractor needs to know they can count on their surety partner to turn that bid bond into performance and payment bonds quickly.

Surety Support Services expertly handles virtually any bid bond even on short notice, and at no cost. As Zach Bradley, President of Surety Support Service states, “The most unique thing about how we handle bid bonds is that we get them written with others can’t.” That is largely due to the years of experience dealing with difficult or hard to place contract bonds and bonds with unusual circumstances.

“There is a scenario when a bid bond could be approved but not a performance bond. The surety is less comfortable writing a final bond if the contractor’s bid is more than 10% lower than the next lowest bidder,” Zach explains. A large bid spread and/or the surety receiving deteriorating contractor financial information are a few reasons why the surety would write a bid bond but then hesitate with writing the final bonds. “The surety will likely ask for more information or have stricter terms, or they may refuse to write the final bonds altogether. After we verify with the surety that wrote the bid bond that they do not wish to write the final bonds, we roll up our sleeves and go to work exploring every possibility to help. We welcome the challenge of providing those badly needed final bonds,” he continues.

The Bid Bond represents contractor prequalification, and that goes a long way towards building confidence with the project owner. When an owner receives a bid bond, they are receiving proof that an independent party (the surety) has vetted the business and deemed it to have the financial and professional capabilities of completing the project. It separates those contractors who have been prequalified (and are bondable) from those who have not. Contact Surety Support Service today for your next bid bond.

For more information contact:Zach Bradley
zach@suretyss.com
866-385-7760

Jun

How the New Tax Laws Benefit the Construction Industry

The Tax Cuts and Jobs Act was signed on December 22, 2017 but the impacts are just now being seen and felt by business owners, especially in the construction industry. Below we have highlighted some of the tax law changes that will be of great interest to contractors and other construction professionals.

Bonus Depreciation

The bonus deprecation rule accelerates the deduction for capital improvements and business expansion. A company owner can immediately deduct short-lived capital investments, but only for the year it is placed in service.

Section 179 deductions

Section 179 deductions also allow business owner to deduct total costs of capital improvements and business investments immediately rather than over a period of years. Again, it must be only for the year placed into service. This incents business owners to invest in their companies, buying new equipment, upgrading software and get the maximum tax deduction as quickly as possible.
This rule is more restrictive than the bonus depreciation. There is limit based on the taxpayer’s income and it has a maximum deduction. However, the maximum deduction is increased from $500,000 to $1,000,000 under the new rule.

Qualified Improvement Property

This tax rule is specifically for the construction industry. It is a narrow rule that allows for accelerated depreciation for improvement to a non-residential building, under certain circumstances. Excluded are changes to “internal structural framework”, building expansion, elevators and escalators. Other than these restrictions there is great flexibility when defining qualified improvements.
For a more in-depth look at these new tax benefits, we invite you to click on the link below.

https://www.jdsupra.com/legalnews/maximizing-profits-how-the-tax-cuts-and-77033/

Note: This blog is informational only and should not be construed as tax advice.

Feb

Contract Surety Bonds vs. Letters of Credit

In today’s lending environment, with credit easy to obtain and often inexpensive many contractors are tempted to choose to secure jobs with Letters of Credit over Surety Bonds. On the surface, this may seem like a sound business strategy, but dig a little deeper and you will discover there may be money and opportunity lost with this approach.

The Surety Information Office provides advice to contractors concerning all aspects of construction bonding. The SIO encourages contractors to consider the following information when determining Letter of Credit or Surety Bond.

Impact on Future Business: Every time a job is secured with cash obtained using a letter of credit, you are decreasing your borrowing capacity. Capacity you may need for expenses like materials and labor- on this job or future projects. By using surety bonds for Bid, Performance and Payment you are keeping your borrowing capacity free should it be needed. As a result, you have the ability to bid and complete more projects year after year.

Costs: Many time a contractor thinks borrowing is less costly. With surety the bond premium is between 0.5% and 2% for owners with good credit. Also a bond covers a specific project. Once paid, that fee covers the duration of the contract based on the terms and condition of the bond. When using a letter of credit, the loan is based on the length of time borrowed not on the project. Renewal is required, often automatic renewal. In the end borrowing can easily result in greater costs.

Collateral: When borrowing you must put up an asset for collateral. The bond underwriting process is based on the principal’s character (including credit score), capacity to perform a project, capital (financial strength) and the details specific to the project needing the bond. A surety bond underwriter considers several factors before (and as a last resort) requiring collateral.

Claims: There is also security in Surety Bonds since the bond is a three-party agreement. There is an investigation process should a surety bond owner claim a default situation. The third party provides a buffer to keep an owner from sudden action. A letter of credit can be called on demand, even if there is a loan term limit. Unlike a bond, a cause doesn’t have to be declared or proven. Using a surety bond and completing a job within the parameters of the bond protects your company’s cash flow and bottom line.

Don’t let your borrowing practices impact the job site, instead secure your projects with a Surety Bond and free up your borrowing capacity and your cash flow. Contact us at Surety Support Services. We can answer your questions and get the bonding process started today.

Want to know more? Call us at (866) 385-7760

Jan

Welcome to 2018

At Surety Support Services we look forward to serving you in 2018. We begin this year with a new website that offers you new ways to communicate, more bond information and easier ways to purchase bonds. Throughout the year we will offer more blog content and new interactive features to the site.

We built this blog section to focus on product descriptions and updates. Also, we will keep contractors, business owners and our partnering agents up-to- date on the latest changes in bond regulation and requirements.

As we kick off this series we put a spotlight on Land Reclamation Bonds. These bonds have a variety of purposes, each having its own challenges including complicated regulations, long term obligations and strict underwriting parameters. Regulations for these bonds are required by federal agencies and in most states, land management agencies.

Oil Drilling Bonds- When a drilling company wants to break new ground on a drilling site part of the regulatory requirements is to obtain an Oil Drilling Bond. These bonds insure the company will conduct the drilling process in an environmentally responsible manner and take any necessary steps to prevent or solve environmental issues. The bonds are issued after a thorough vetting of the company’s business plan, track record and financial situation. They are necessary as long as the drilling site stays in operation. Oil Drilling Bonds typically have a set term for renewal, usually annual where the company goes through an underwriting review process.

Oil Well Plugging Bonds– Once drilling ceases, the company must guarantee proper plugging of the well and return the adjacent land to its original condition. Bond amounts and length of terms vary by each job and by the state where drilling occurred.

Surface Mining Bonds- Just like oil drilling, surface mining is a heavily regulated industry. Usually under state law, a surety bond is required to ensure the mining company follows proper procedures during the mining process and the land reclamation process. Once mining ceases, the company must return the land to its original condition. Mining and reclamation permits can last many years, so one reason why Surface Mining bonds are considered hazardous is due to their “long tail liability.” There may be cancellation provisions in the bond form that allow the surety to “get off the bond”. However, if a principal doesn’t replace the bond within the cancellation period, the surety might be forced to immediately forfeit the entire bond penalty. Surface Mining Bonds typically have a set term for renewal, usually annual where the company goes through an underwriting review process.

Landfill Bonds- Landfill operators must obtain a surety bond when opening, expanding and operating a landfill. Depending on the terms of the bond, the length of the obligation could be decades. There is also a period time after the closure of a landfill that the bond obligation must hold. These operational bonds are often difficult to underwrite because they are, in practical terms, open ended. These bonds require annual renewal and underwriting review.

Every company that operates to extract or use land ultimately must satisfy the requirements set forth by the communities where they operate. When choosing a bond company, you want someone who understands your business and can help you obtain the best deal. At Surety Support Service we have spent 40 years building a business helping companies like yours. We get you the best terms and the best rate for your Land Reclamation Bond, and we fulfill your bond needs quickly, so you can get back to business.