Author, Matt Gaynor, Director of Surety, Rancho Mesa Insurance Services, Inc.

Several years ago, I put together an article on various credit driven surety bond offerings that require a one-page application to qualify for bonding. Quick and simple! At that time, the maximum limits offered by various carriers was $350,000 for a single bond.

Last week, I received separate emails from two of our partner surety carriers offering single bond programs of $600,000 and $750,000, respectfully. Again, these quick and easy bond offers are solely based on personal credit scoring. In other words, if the owner of a construction company pays their personal bills, then they most likely will have the ability to qualify for a decent-sized bond.

There is no need for company financial statements to qualify for bonding in these programs. Instead, the contractor completes a “fast” application requesting personal financial information about the owner(s). The bond company will run the personal credit of the owner(s). If the personal credit is decent, the bond will be approved. A response is provided within 24 hours of submission. 

The program responds to requests for bid bonds, performance and payment bonds, and letters of bondability. Several carriers provide a “pre-qualification” feature so you can determine if you will qualify for the bond before you bid or negotiate a project that will require a bond. This pre-qualification feature is helpful for owners that are concerned they may have low credit scores.

The standard premium rate for these programs is 3% of the contract amount. Based on the strength of your personal credit, and the type of work you are looking to bond, we have seen this lowered to 2%. 

Therefore, if you are considering a project that requires a bond and you are not a big fan of collecting a lot of paperwork for one project – don’t fret. We may have a solution to help you win that job.

If you would like more information on how to qualify for these programs, please contact me at (619)937-0165 or mgaynor@ranchomesa.com.