We sometimes have clients that avoid the unknown, because it’s scary or stressful. Avoiding projects that require surety bonds might seem smart at first but as more industries embrace surety bonds, your company could miss out on new and valuable work if you aren’t willing to consider the opportunities presented by surety bonds.
Bonds Go Beyond Construction
A surety bond guarantees contracts will get completed and all subcontractors and suppliers will be paid. Much of the time, it is government contracts that need a bond to guarantee the taxpayers’ money is being used to hire a contractor that will complete the job, like building a bridge or school. If the contractor runs into problems, the bond company will come in and finish the job to ensure taxpayers receives a completed project. Our team helps prequalify contractors before the project begins, guaranteeing they can take on and complete the job.
We have seen more banks requiring surety bonds recently, as well as churches, homeowners associations, and any organizations where people pool their money to make an improvement and put their trust in companies and contractors to bring their vision come to life.
We are also seeing more non-construction performance bonds as well. From kitchen, office, and playground equipment to supplies and services, bonds have become a valuable guarantee that a project will be completed and those whose money made the project possible will see a return on investment.
Bond Benefits Outweigh Extra Work
Sometimes contractors avoid bonded work because they don’t want to go through some of the paperwork or don’t want to deal with the hurdle of getting a bid bond. In many cases, a quick meeting can illustrate the potential value and opportunity that projects with bond requirements can offer, opening the door to new profits and networking.
You might be wondering why companies outside of construction are utilizing surety bonds. Surety bonds can be substituted for traditional bank letters of credit, including performance obligations, workers’ compensation, utility payment security, and more. Plus, surety bonds don’t take up capacity in your company’s credit facility or require your company to maintain certain financial ratios. The benefits of surety bonds can’t be overlooked when considering taking on a new project within the construction industry or beyond.
Are Surety Bonds Right for You?
If you’re new to the world of bonds, our experts can help you navigate your obligations and understand what you are and aren’t responsible for as a contractor. Don’t let fear of the unknown hold you back from your potential. Reach out today and let’s get started!
