Project owners often require performance and other bonds from contractors. Considerable information is asked for and the process is usually time-consuming, so getting your performance bond requirements in order early is crucial. Most importantly, the quality of the information provided can influence whether or not surety credit is granted and to what dollar extent.
Bonded NZ offers preparation and guidance to help contractors maximise their surety bond credit. We can arrange a facility in advance to minimise delays in the issue of the required bond, for an amount that will cover all the contractor’s possible requirement over the following 12 months. Once the bond has been issued, we will help the contractor keep the documentation current and up to date.
What you need to get started
Reputation and experience
To establish reputation and/or experience, we recommend including in the documentation any industry and credit referees, quality assurance and past projects, as well as relevant photographs and brochures.
The importance of financial reporting cannot be overstated, so make sure this documentation is prepared in proper form by a chartered accountant. Plus, bond providers often require continuous reporting during the course of the year, to track your progress. Over time, good financial progress and reporting can enhance your ability to obtain additional bond limits.
Personal financial statements
Alongside your business’ financial statements, the bond provider will also ask for personal financial statements of the individual owner (or owners). This will help the provider assess if the applicant has enough capacity to support the cash flow and funding needs of the business.
Game plan and vision
Having a sound and realistic game plan is key. Proof of this can include expertise in certain construction methods, proven abilities in value engineering, and even a close relationship with certain project owners. The provider will also assess your point of view toward bidding, obtaining work, and taking risks.
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