As a contractor, you probably understand the importance of having a bid bond. After all, if you don't have one, then you might find that it will be difficult or impossible for you to bid on certain projects, particularly larger-scale projects, which could prevent your business from growing like it should. Additionally, not having a bid bond can make your construction business seem less reputable among potential clients who might have already worked with companies that had bid bonds, since they will know that they might not be protected. Of course, you do have to get approved for a bid bond, which can sometimes be difficult for some contractors. These are a few tips that can help you get approved.
1. Start Small
For one thing, even though you might like the idea of having a large bid bond so that you can bid on the largest projects, you should consider the needs and size of your business. Right now, if your business is small and is just starting out, you might have trouble getting approved for a large bid bond. Plus, if you do get approved, you'll have to pay higher amounts than what might really be reasonable for your business. Instead, consider starting out with a smaller bid bond that might be more in line with the projects that you might be taking on while your business is small and is still growing. Then, later on, you can apply for a larger bid bond, which might be easier once your business is more well-established.
2. Gather Your Documents
The companies that grant bid bonds generally look at various things when they are determining whether or not to approve a contractor. For example, they might look at your financial records to get an idea of how financially secure your business is, and they may want to look at any past projects that you might have bid on and completed. Gathering up as much supporting paperwork as possible can help you prove that you are worthy of being approved for a bid bond and can help speed up the process, so you may want to take your time in doing so before applying.
3. Apply with Multiple Companies
There are various companies out there that offer bid bonds. If you get turned down for the first one that you apply for, you shouldn't get discouraged. Instead, consider applying for a bid bond through another company. Some companies actually work with a lot of beginning contractors and might be willing to take a chance on you and grant you the bid bond.