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Surety Bonds and the New Changes in Lease Accounting

The Financial Accounting Standards Board (FASB) began to overhaul the lease standard approximately 13 years ago. Educational materials can be found on their website. The new standard became applicable to private companies on December 15, 2019 (which means it is already in effect). Note that this change only affects private companies, as public business entities […]

Bonding Design Build Projects

The most popular method for construction project delivery is still design-bid-build. This is where a design professional and owner create plans for a project before sending the project out to bid. A contractor is then selected to build the project. However, that is changing. According to a study by FMI last year, Design Build projects […]

Funds Control and Surety Bonding – The Good and Bad

Funds control is a term used in surety bonding and can also be called funds administration or just escrow. It usually involves a third party handling the contract proceeds to process payments for bonded contractor. The idea is very similar to a construction loan on the residential side. The process typically looks something like this:

Surety Bonding, Continuity and Succession Planning

Transitioning any business can be a challenge but maybe even more so in construction. You must decide whether to sell to a family member, key employee(s), or even a third party. What is the firm worth? Is the value in intangible customer relationships, industry knowledge or hard assets such as equipment? How will the new […]

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 […]