Are surety bonds right for me?

As a contractor, you must consider every aspect, every angle that may come into contact with your business. It is your responsibility to take care of these things, and plan ahead of them to prepare. Surety bonds are a great way to do this, because they secure your client against anything that might happen. Surety bonds are security instruments that pay your client in cases of things not getting done according to contract.

The way it works is that you contract with a surety bond company and agree to pay them a monthly fee, usually. They agree to extend to you what amounts to a line of credit so that there is an amount of money available to be paid to the client if anything goes wrong. This is very reassuring to your clients and really puts you in a different place than your competitors. Surety bonds place you on a higher level, and all things being equal will get you the bid over others simply because you took the steps to secure them ahead of time.

Surety bonds are sometimes required by different entities, and this puts you in a different place altogether. It is one thing to put a surety bond in place ahead of time for your customers, but it is quite another to have a surety bond be required of you by either a government or company you are trying to secure business with. Don’t be caught unprepared.

What about surety bonds?

Should you get a surety bond? What are the criteria? How hard is it? What if I have bad credit? These are all questions that contractors ask every day about surety bonds. If a surety bond is so good, why is it so hard to get? That is a great question, and one I will answer in a second. First, let’s talk about the surety bond itself. Surety bonds are as old as business transactions, just about. The first one found is over four thousand years old, and dates back to Sumerian times. That is how far back insecurity goes back in business deals. People do not like to feel unsafe, and the warning “Buyer Beware” and its age attests to that. People buying a product many times feel that fear that they are making the wrong decision or that they are hiring the wrong contractor, and you want to take every opportunity that you can to alleviate that. Surety bonds are one more arrow in your quiver in this area. By taking out a surety bond, you are showing that you are trustworthy. In a very real way, you are putting your money where your mouth is. This is true because you have to pay the surety bond company back if they end up having to bail you out if you screw something up.

Remember, surety bonds make the customer feel better. Because of this, you can’t afford to be without one.