Sometimes getting a bond is harder than it should be. You search for days sometimes months trying to find a bonding agency that can help you. If you have Alt-A credit many bonding companies will not be willing to extend surety credit. Most Surety Company requirements require a minimum of a 660 credit score to extend credit. Since surety companies have a no loss philosophy. What I meant by that is if you get a claim on you bond you have to pay the surety back. So surety companies are weary on write bonds for clients at a financial disadvantage The surety most of the time wants to see businesses with a high credit rating as well as stable and strong financial. With the way the economy currently is it is harder for a business to obtain their license bond, when a surety does not want to bond a company that is showing a loss.
Surety companies have been reluctant on writing larger performance bonds since these bonds pose the biggest risk. With contractors not having the ability to borrow against their home. It has made it harder to increase their working capital to fund larger projects.
Contractors have been suffering the most. Now the SBA has expanded its bonding programs to help accommodate contractors with their growing needs. The SBA is now bonding contractors with higher limits. Contracts that need Performance and payment bonds are now able to perform larger federal jobs. This has brought relief to many contractors because surety bonding companies have not been willing to write larger bonds.
Robert_Jake
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