Exploring The Question – What Do they Cost?
As a building contractor or developer, you will want to be able to ensure all of your clients that you are responsible. Of course, your clients may want this guarantee in writing. This is where the surety bonds will come into play and once it is signed by all involved parties, it will become a legal document. Below, you will discover the answer to the question, “What do surety bonds cost” and so much more. If at this point you are still unsure about if your business needs surety bonds, click here to read why they are needed.
Laws of Canada
If you are a new contractor, you will need to speak with your attorney or Canada Revenue Agency. These sources will provide you will all the information you need regarding surety bonds. The CRA agent can help steer you in the right direction, so that you can stay current with the legal acts.
Cost And Deviation
As someone, who must invest in surety bonds, it is vital to take the time to learn about the potential costs. The truth of the matter is that the cost is anything, but universal. In fact, it is very unlikely that two individuals will be able to acquire an identical price. There are a handful of variables and each of them will deviate the price in one way or another. However, you should know that the cost is simply a percentage of the finalized bond amount. Below, you’ll discover a breakdown of some of the key factors, which will help to determine your final fee.
- Your credit score
- Type of bond in question
- Business history
- Your surety company of choice
- The total cost of the bond
The surety will analyze each of the factors above and provide you with a total.
Your Line Of Work
Another factor, which can cause the premium to fluctuate, is your specific line of work. Some business industries are considered to be much more risky than others. If you operate a business in a high-risk industry or sector, you will most likely be required to pay higher fees, regardless of your individualistic business history. Although this may not seem fair, it is simply how the bond market works. Thankfully, there are a few things you can do to offset the expenses to some degree. These things will be examined a little closer in the paragraphs below.
Tips For Acquiring The Best Rate
In order to ensure that your company will be able to generate bigger revenue, it is truly imperative to try and pay less for your bond. The good news is that there are ways to lower the fees. First and foremost, you will want to do your best to keep your personal credit in pristine condition. This variable is truly one of the most important and all surety companies will put a lot of credence in your credit score. By keeping an immaculate personal credit history, you’ll be able to minimize your costs.
At the same time, you should do your best to establish a lengthy and reputable business history. It is essential to make sure that your company’s reputation remains unblemished. Make sure that you avoid complaints, debts and lawsuits. Companies, which have been histories, will be much more likely to acquire lower prices.
Finally, you need to go above and beyond to research the various surety companies. Each is different and one of these companies will be able to provide you with a lower fee than the rest. Search around and acquire an abundance of quotes. Put in the effort and you’ll be able to find the most generous price possible and this will help your business flourish, while ensuring that you are able to acquire the needed bond.
Bad Credit Concerns
Many business owners will be seriously concerned about their credit scores. As already mentioned, your personal credit will play a vital role in determining your premium. However, there is some good news for those with bad credit. Although you may need to jump through additional hoops, it is more than possible to acquire surety bonds with terrible credit. Of course, this will depend extensively on the type of bond in question. Generally, those with bad credit will still be able to acquire license bonds, fidelity bonds and contract bonds. Court bonds may be a little more difficult.
Just remember that the surety will use your credit score to judge you and your final premium will be directly impacted by this figure. Therefore, those with flawed credit scores can expect to pay higher fees.
There are innumerable people within the country of Canada that do not fully understand surety bonds. This is especially true, when it comes to the costs of bonds. The truth of the matter is that there is no set price. Instead, each consumer will be required to pay something unique, which will be based on a handful of factors and questions asked by the surety. Therefore, it is truly impossible to determine the price you’ll get when you request a SURETY BOND QUOTE, without speaking directly with a licensed bond provider!
Other frequently asked questions regarding surety bonds
- What Is Required In Order To Acquire A Surety Bond Within Canada?
- How Long Does It Take To Get A Surety Bond?
- Do Construction Bonds Expire in Canada?
- What is the Difference Between Construction Bonds And Contractors Insurance?
- Why Do Businesses Need Surety Bonds?
- Who Requires Surety Bonds?
- What To Look For In A Surety Bond Broker?
- Does Personal Credit Score have an Impact on getting Surety Bonds?
- How To Find The Lowest Annual Surety Bond Rates