Illinois Changes Law on Retention

I’ve said it thousands of times, but construction is a cash intensive business. Few things can make or break a contractor faster than cash flow. That’s why retainage laws are so important. The recent Illinois retention law change now has Illinois joining many other states in enacting retainage laws that limit the amount of retainage […]

Letters of Credit vs. Surety Bonds

If you are a small business owner, you have likely heard that a single unfulfilled obligation or missed payment can have a huge impact on your operations. If you want to protect yourself and your customers, you can use letters of credit or surety bonds to manage the risks.

How Do Surety Companies Determine Work-in-Progress for Contractors?

A Work in Process schedule, commonly called a WIP, is an extremely important report that’s produced by a contractor’s accounting system. Modern surety companies use Work-in-Progress for contractors to review the total progress of various construction contracts that are underway at the time.When used properly, WIPs can be valuable tools for the contractor, too.

How Can You Increase Your Surety Bond Capacity?

Are you looking for a way to increase your surety bond capacity? If so, you may find the answer you get doesn’t always offer the desired clarity. That’s because no two contractors are exactly the same and there are no two contractors that are dealing with the same exact circumstances.

Why Paying Off Debt May Actually Hurt Your Surety Bonding

It is said that, “The only man who sticks closer to you in adversity than a friend is a creditor.” Debt can put a stranglehold on a contractor. It creates the need for more volume and profit just to cover interest obligations. It can be difficult to get rid of when times are tough. That’s […]

Surety Bonds and the Principle of Indemnity

One of the most important and misunderstood terms regarding surety bonds is indemnity. Surety bonds are written on the principle of indemnity. In plain terms, that means that if the bond company suffers a loss, they expect to be reimbursed (indemnified) from the indemnitors. As such, surety is credit product and more related to banking […]

SBA Bond Program – A Useful Tool for Contractors

Did you know that the Small Business Administration has a program for surety bonds? The SBA itself is not a bond company. However, in the program the SBA will guarantee will guarantee that if a surety bond company does suffer a loss, the SBA will reimburse the company for 80-90% of the loss. This financial […]

How Bond Companies View Bank Lines and Why You Probably Need One

An important tool for all contractors is a bank line of credit. In a perfect scenario, all construction companies would have bank accounts full of cash at all times. Unfortunately, this is not always the case. Construction is a very cash intensive business that typically involves paying for labor, material, equipment and other costs before […]

Backlog and What it Means to Your Bond Company

My experience has taught me that in order to be a good bond agent, you need to be able to translate. Unfortunately this has nothing to do with those foreign languages classes I took in High School. No I’m talking about being able to speak the language of both contractors and bond underwriters. One great […]