FAQ about Surety Bonding
What is the process to set up a bonding facility?
- Initially, we start with an application and the minimum required financial information.
- Depending on the information contained in these documents, we may need more financial information and/or business experience information.
What information is needed to start to the application process?
- We require a copy of the latest accountant-prepared financial statement.
- The latest copy on in-house income and a balance sheet with same date aged listing of accounts payable and accounts receivable.
- A completed contractor’s questionnaire.
- A completed work on hard report matching the latest in-house statements.
What is the timeline to get a bond facility set up?
- The review process takes 2–3 days. If everything is aligned, we can set up a bonding facility within a week. If more information is needed, it could take up to two weeks.
What is the cost?
- The annual cost to have a bonding facility is $1,500. There is no extra cost for additional bid bonds.
- Should you require final bonds for a successful bid, the typical costs are:
- Performance Bond $6/$1,000 of full contract value
- Labour and Material Bond $4/$1,000 of full contract value
- To set up bonding, the company must have a minimum of $50,000 working capital and tangible net worth:
- Positive equity and profitability
- Experience completing the jobs you will be bidding on.
- Once a facility is set up, we will require updated information every quarter:
- In-house income and balance sheet.
- Same dated aged listing of accounts payable and accounts receivable.
- Updated work on hand report.
- Annual accountant-prepared financial statements on review engagement basis.