From the category archives: Business

Business

Surety Bonds, LOCs and Parental Guarantees: What’s the Difference?

To address the security need, owners and contractors can be faced with a choice between traditional surety bonds and letters of credit (LOC). Additionally, parental guarantees are often included as a supplement or substitute for the security. These alternatives have unique implications that should be considered by contractors and owners when choosing the best path.

Sureties Hungry for Business Across Market Sizes

Construction Executive surveyed top leaders in the surety bonding industry to create a big-picture view of the current state of the market. Overall, the news is positive for contractors. Experts say construction and surety market cycles have been strong, creating increased competition. 

Preparing for the First Contractor-Surety Meeting

Successful contractors spend time and effort establishing their first surety company relationship. Contractors that want faster answers and the benefit of the doubt from their surety in a delicate situation will always welcome face-to-face visits with their professional agent and underwriter. 

Inside the Mind of a Surety Bond Underwriter

It is truly amazing how much risk contractors take on a daily basis for a seemingly modest return. Likewise, for the surety underwriter—which is, in fact, guaranteeing the contractor’s work—a tremendous amount of trust is involved.

Executive Insights

  Eighteen surety experts offer advice on how contractors can take their bonding capacity to the next level, how character impacts bondability, the cash management techniques contractors should employ to be successful as the economy recovers, and the bonding implications as the government promotes joint ventures as a way for small businesses to participate in federal projects.


The Impact of Succession Planning on the Surety Relationship

When evaluating a succession plan from the perspective of the surety, executives should focus on maintaining technical and operational excellence, surety relationships, projected cash flows and its strong financial position.

Beyond the Basics: Three Overlooked Bonds to Keep Projects on Task and on Target

There are numerous types of bonds to consider depending on the size and scope of a project. Don't forget about wage and welfare bonds, transactional commercial surety bonds and subdivision/completion bonds.

An Overly Soft Credit Environment Can Adversely Affect Small Contractors

Fast bond products or “quick issue” bonds have sped up the process of obtaining a bond for smaller projects. Quick turnaround and minimal underwriting—sometimes solely based on credit score—allow for speedy answers when time is of the essence. That’s the upside. The downside of this softer credit-based underwriting is that the relationship-building and counseling process can suffer. 

Crafting a Strategy for Benefits Management

Construction leaders should evaluate the medical and non-medical benefits they offer and spend some quality time with their workforce to get clarity on desired benefits choices. Enrollment season is not far away, making it a great time to reassess the company’s benefits package, fill any benefits gaps, and educate the workforce to ultimately increase loyalty and commitment and create happy and productive employees. 

Property Leasing Vs. Owning: What Makes Sense for Your Business?

  Leasing versus buying is a choice that can significantly change a firm’s future cash flow, tax strategy and net equity on the balance sheet. Both approaches have pros and cons, and it is important to understand the potential impacts of each option before making a decision.

 

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