One of the main questions we receive at United Surety Bonds is, “What does it take for me to get a bond?”. First, what you need to know what type of bond you are looking for.
LICENSE OR PERMIT BONDS
If you need a license or a permit bond we just usually need your companies name and address, name of city, town, village, or state requiring the bond, and the amount of bond. These bonds are usually around $100. They are in almost all cases issued within a couple of hours. A few license bonds require the Social Security Number of one of the owners of the company. Generally the credit score for these bonds needs to be 700 or above. If your score is lower and the bond requires a credit check, United Surety bonds can still get you bonded, it is just more expensive.
Bid bonds are required in most cases when you are bidding any type of government work. They generally range from 5% to 20% of the contract price. Also on occasion a prime contractor may request a subcontractor to provide a bid bond for certain projects. It is very important to realize that the bid bond leads to a payment and performance bond if you are awarded the job, therefore the total contract price controls what will be required paperwork-wise to obtain the bid bond not the bid bond amount. The requirements for contracts under $350,000 are just that the business has been in business for over a year and that at least one of the owners has credit score above 700. There is a simple one page application for these type of bonds. If the contract price is between $350,000 and $1,000,000 there is a much more extensive application that will need to be completed. In addition, financial statements for both the business and the owners will be required. (At least the last two years from business and a year to date statement.) If the contract price is above $1,000,000, we would need all of the above in addition to a CPA review of the business financial statements.
Do not forget to include the cost of the payment and performance bond in your bid. As a general rule, for projects $350,000 or less the rate is 3% of the contract price. For larger projects, bonds are at most 2.5% of the contract prices and get lower the greater the amount of bond. The turn around time for bid bonds under $350,000 is no more than 1 business day for new applicants. In some instances we can get you approved the same day, so you can have bond first thing in the morning. For larger bonds it may take a day or two get your application approved. Once your account is established, we can issue bonds same day. At United Surety Bonds, we do not charge for bid bonds.