Contractors that are able to win certain bids on projects will be required to get performance bonds if they want to pursue this line of work. It is like a type of insurance policy, making sure that the person who won the bid is going to be honorable and complete the job. This can be a huge problem for certain businesses where people are going to bid on projects, bidding so low that they would not even be able to complete the project without a loss. To prevent this from happening, which is a waste of time for people that are offering these different jobs, performance bonds will be required in many cases.
How Performance Bonds Work
These are bonds that can be obtained from bond companies, those that issue surety bonds and performance bonds alike. You can find these companies locally, or you may be able to get them nationwide. It is important to compare rates that they are offering, and also look at the requirements for getting each one. You will want to work with the company that will allow you to ensure up to $350,000 per job in some cases, and will only require a credit check, and no additional paperwork, in order to issue the bond.
How Do You Find These Companies?
You find these companies by searching online. This will allow you to look at as many different offers as you can. Some of them will allow you to save hundreds, or even thousands of dollars, which is why comparing these different rates is so important. If you can submit this information online, it will make it easier for you to submit multiple ones to different companies. If you can, you will find that this is the best way to get bid bonds or performance bonds because it is fast and efficient.
What If You Have Bad Credit?
If you have bad credit, there is still a possibility that you will be able to get performance bonds because they will look at your track record in this industry. You can simply show them proof of previous jobs that you have completed, and they will then issue the bond to you. You will be able to find several companies that will overlook average credit ratings, those that are under 700. Most of them can issue a bond in as little as 24 hours, or at least have it approved so that you can start working on your project.
Even though this may be a hassle for some contractors, it is a necessity in this world where people underbid others just for the sake of winning. They have no intention of actually honoring that bid, and then they have to fly the job once again to go through the process. If this is what you are going through right now, simply find a national company from websites like www.theislandsaz.com that offers bonds at the lowest possible prices. One of them will be able to give you a performance bond for one or more jobs that your company will be working on.