Surety bonding for a construction/trade contractor

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May 20, 2021

by a searcher from Stevens Institute of Technology in New York Metropolitan Area, USA

Looking at a few deals in the construction/RE space that requires bonding. Has anyone acquire any companies recently that required surety bonds? What requirements do bonding companies have for:

1. Debt and/or equity financing

2. Personal guarantees

I'd like to speak to people who have dealt with this recently.

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Reply by a searcher
in Alpharetta, GA, USA
Ajay occasionally I have contracts that require a bond. Getting it is not difficult if the business has a good insurance broker and a history of being bonded and always performing on its bonded contracts. The bond underwriter’s main concern is going to be your lack of experience in the specific field of business - which is the same concern that an SBA lender has. The way around both of those is (I) be sure and retain all the key operating personnel and (ii) do a good job of convincing the underwriter that you are a good risk. That is more art than science but then again so is most of running a business.

Feel free to ping me directly if you want to get into this more deeply. redacted
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Reply by a searcher
from University of Richmond in Valparaiso, FL, USA
Ajay, I have dealt with bonding requirements associated with road and highway construction. Like Christian said, you will need to find a good agent to help you overcome your lack of experience in the field. Not to say hard...just something that needs to be planned during DD rather than post closing. Also happy to chat. I have a great group of guys at Ironwood in Atlanta
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