Why do I need a bond?
Bonds guarantee to an owner, general contractor, or a developer (whomever you are doing work for) that you will complete the work according to the contract and pay all your bills.  On local public works projects, by most statutes, any contract over $25,000 requires at least a payment bond and in most cases performance and payment bonds.  Certain general contractors require bonds of their subs as well, and the threshold for when they require the bond varies by general contractor.

Whom do I call to get bonded?
It is recommended that you call a professional surety bond agent who is skilled in assisting you with the information that you will need to provide to the bonding companies.

What information do I need to provide?
Your agent will provide you with forms for you to complete that will demonstrate your company’s abilities, financial position, and character as they will relate to your bonding needs. A partial itemization of that information is business and personal financial statement, a questionnaire about your business, a work on hand schedule and verification of bank accounts.

How long does it take to get a bond or be approved for bonds?
Once COMPLETE information has been provided to your agent, the turnaround time is generally one or two weeks.

How much does it cost?
Typically between 2% - 3% of the contract amount.

Who pays for the cost of the bond?
Depending on your contract, the bond cost is generally a job cost which you should include as a part of your contract.  The cost which you will pay to your agent is then covered under that contract.  There may be situations where the owner, or general contractor if you are acting as a subcontractor, may pay for the bond premium outside of the contract. 

Is there anything that would absolutely keep me from qualifying for surety credit?
Federal tax liens--whether paid off or not--and bankruptcy generally will preclude you from being "bondable".  

What will my bond capacity be/how big of a bond do I qualify for?
Your bond capacity is determined by the financial and other underwriting information provided in your business and personal financial statements, the historical information relating to the type of work and/or the largest contract you've done in the past, etc.

Why do you need my personal financial statement?
The surety company will tend to consider your personal assets as well as your business assets and net worth to increase their comfort level in providing you with surety credit.

Why do my spouse and I both have to provide a personal guarantee to the bonding company?
In the event you cause a loss to the surety on a bonded job, the surety will look first to your company for repayment of any costs involved in handling the claim. They will then look to you as an individual if the assets are not available from your company.  Under California law, your personal property is considered to be community property shared equally with your spouse. Therefore, both individuals' personal indemnity to the surety company is required.