Sep
26
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:

  1. The experience and ability to successfully complete the customer’s contract
  2. Adequate finances & equipment
  3. 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
02
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.  

Mar
30
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
20
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.

Jan
10
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
04
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
05
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

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