Contrator's most valuable resource
In today’s market, the job of a contractor is growing increasingly complex. Balancing the operational requirements of your project with sound, financial decision making and proven risk management can provide challenges. These challenges may require looking for a trusted, experienced resource to advise and assist you.

Your bond agent brings a wealth of knowledge to the table in the areas of financial, operational and professional guidance.

Financial Expertise

Many contractors realize that they can’t be great at everything. The reality is, their strength may not be the financial piece of the business. Frequently, larger contractors rely on a strong CFO to overcome this weak spot and handle the financial aspect of their business. But, hiring a CFO is not a viable option for all contractors.

That’s where an experienced bond agent can step in to provide trusted, financial advice for lower revenue volume contractors.

Bond agents have expertise in the areas of:

  • Balance sheet structures
  • Work on hand analysis
  • Overhead analysis
  • Long-term asset returns.

Combine this expertise with a hands-on knowledge of the contracting industry, and you have an undeniably strong resource on your side.

Subcontractor Risk Management

A professional bond agent understands the intricacies of working with subcontractors and has first hand knowledge of what works and what fails. My experience in the surety industry has shown me that the more you know about your subcontractor prior to beginning a project, the better the outcome will be. Let your bond agent act as your resource when securing a subcontractor for your project.

Bond agents have expertise in the areas of:

  • Pre-qualification statements
  • Subcontract bond requests
  • Mitigating risk through purchasing materials

One of the best ways to learn about your sub contractors is to ask for a yearly pre-qualification statement. The pre-qualification statement should include a letter from the subcontractor’s bond agent. Most subcontracts submit these statements for large, regional general contractors. Work with your bond agent to research your subcontractors and access this information.

Minimizing your risk on the construction project should be priority one. After accepting the scope and accessing the pre-qualification, consult with your bond agent on determining which trade is your critical path. Your critical path drives the timeline of the project. For example, HVAC and electrical contractor for a renovation project or a directional boring/tunneling contractor for a highway project.

The largest exposure for a contractor can be the materials a subcontractor uses. It’s important to realize that lien waivers are non-binding when the money has disappeared. Often, buying the materials directly significantly mitigates your risk. Work with your bond agent to determine if a direct purchase of materials is the most secure option for your project.

Relationship Building

Your bond agent has their finger on the pulse of your industry. They can serve as a great resource to find other key partners to your business. My work as a professional surety agent affords me the opportunity to rub elbows with construction attorneys, partners at CPA firms and bank presidents. Utilize your bond agent’s networking to tap into these types of relationships.

As a contractor, your bond agent is your most valuable resource. Work closely with them to further your success. To get in touch with one of our valuable resources please contact us today.

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