One certain way for you to get the bonding process started and moving along quickly, is to be prepared to fulfill its requirements.
Know this: Surety Bonds are not insurance; although issued by an insurance company, bonds are underwritten as a financial obligation. When you seek out the services of a surety bond agent, and prepare the documents they require, a part of your role in the process involves providing financial information from your business operations and personal financial statements from the business owner(s).
Here is what you will need to apply for the surety bond:
These include both personal and business financial statements. Your financial history is the first indicator of your capability in fulfilling the demands of a job.
The size of your company determines which type of financial statements you are expected to supply to the agent. Companies with sales less than $20 millionhave to provide:
- Financial statements of the previous year, and an ongoing compilation for the current year. Tax returns do not take the place of the Balance Sheet/Income Statement and Schedules of Receivables and Payables.
- Personal financial statements of chief shareholders in the company.
- Evidence of Business and Personal Federal and State tax filings.
- Bank statements and a reference letter from the bank.
For companies with sales higher than $20 million, the above requirements may not be necessary; however, a reviewed or audited of their financial statements of the previous year is necessary.
Bond Agent’s Questionnaire
Though the specifics of a questionnaire are not exactly set in stone—as the questions depend on the agents’ concerns, some basic information is a standard.
You should be able to provide details such as yourtax ID, the state in which your company is incorporated, and the number of people employed in your company.
Your assurance alone is not enough to convince a bond company of your reliability, despite how great it is. You are required to provide references, defining your performance—from previous jobs, suppliers—to back your own claims of assurance.
Work In Progress (WIP) Form
A WIP form allows bond agents to review and analyze the timelines of your previous and ongoing jobs, as well provide details of any outstanding surety bonds.
The WIP forms you provide should cover the work done during the previous year and the current year. In order to avoid skipping any crucial details, make sure you acquire this form from the bond agent you are working with.
Certificate of Insurance
This certificate, issued by your insurance agent, is a means of verifying that the job has proper coverage under the terms of the contract.
Preparing for the bond with diligence is the first sign that you are committed to completing a job you start. You assure the bonding agency that you will also finalize the job covered by the bond’s terms. A Status of Completion form showing the date the project was finished and the final contract price including Change Orders is required
At BondPro, we guide individuals in gathering the correct documents to get their bond expedited with efficiency. As an online surety bond agency, we provide quick access to our writing services in various parts of the US, including California and Florida.
Get in touch with us today to get your surety bond.