Monthly Archives: October 2011

A “Secret” Way to Profits for Local Contractors

Common knowledge tells us that local contractors of all types are having a hard time making it in the current economy. When times were good, contractors could pick and choose the types of jobs they would accept—and the money rolled in.  Today, it’s a different story. We are all scratching for work.

Here’s the “secret” I want to share with you in this post: Going after bonded work is a great way to get profitable projects that other contractors are passing by.

Cities and counties and state agencies always seem to have work in the pipeline, even when private projects are drying up. There’s often less competition for these public projects, however, so they tend to be more profitable for the winning contractors. The main reason there’s less competition for these government projects is that they usually require contract bonds. Because many small contractors have had bad experiences applying for bonds, many of them let these opportunities to bid profitable projects pass them by.

Too many contractors encounter difficulties, because they don’t take the time to understand what the bonding companies are looking for. So over the next few weeks I’ll try to take some of the mystery out of contract bonding by addressing the basic issues of contract bonding. Topics will include: What is a surety bond? What is the language I need to speak so I can “be at the table”? How is bonding different than credit, insurance or other guarantees? What types of jobs require bonds?  What do contract surety bonds actually do?

In the meantime, here’s a piece of good news for you. It’s getting much easier for responsible contractors to qualify for contract bonds. There are new, streamlined programs that make it easy to bond contracts up to $350,000. These programs have been developed for contractors working in low-risk trades, who have good credit and a history of completing their work. The trades that qualify most easily in these programs include painting, electrical, plumbing, tile, remodeling, erection of small buildings, and many other artisan trades. Trades related to environmental cleanup, on the other hand, are more difficult to qualify.

In either case, working with an understanding partner will smooth the process even further. So if you want to learn more about these streamlined bonding programs, and find out whether you qualify, please feel free to give us a call (303-755-8600).