Performance Bonds – The Importance of Timely and Quality Financial Reporting

If you’re reading this, then you most likely know about surety bonds.  If you’re in the construction industry, then you definitely know about performance bonds.  You may think they’re a necessary evil or you may think they’re an asset to your business.  Regardless, if you’ve been through the surety approval process before, you recognize just how important financial statements are when you establish your surety line of credit.

Why is Timely Financial Reporting So Important?

The timing of your financial reporting is important because surety companies continually evaluate your bond program.  Surety bond capacity – the total amount of surety credit allowed at one time – changes depending on new work added to your program and old work which has been completed.  New work which is added during the year decreases your surety bond capacity.  Work which is completed either entirely or a percentage thereof adds to surety bond capacity.

For example:  Let’s say your surety company offers you an aggregate surety bond line of credit in the amount of $2 million.  This means the surety company will provide performance bonds as long as your company’s total work on hand does not exceed $2 million.  Now let’s say you have roughly $1 million of work currently underway or in process and you pick up another $500,000 project.  This means you have $500,000 of surety bond capacity remaining ($2 million less $1.5 million equals $500,000 in remaining capacity).  Now let’s use the same example of $1 million in work in process but let’s assume you’ve completed $500,000 of the $1 million in process.  This means you now have $1.5 million in remaining surety capacity ($1 million less $500,000 equals $500,000 in process).

Constant and consistent financial updating keeps the surety company in-the-know about your company and its activities.  It allows surety bond underwriters to approve performance and payment bonds quickly.  This means there’s no last minute rush to provide a financial statement for that last minute bid bond request.  It also means that any questions the surety company have regarding your financial statements have the opportunity to be answered before a last minute request.  Basically, it results is a much smoother process which, in turn, allows for quicker turnaround for your bonds and a better surety relationship.

Why does the type and quality of the financial statement I send to the surety company matter?

Surety companies rely on a few key factors when determining how large of a surety bond program to give a client.  One of those factors is a contractor’s financial statements.  Financial statements tell a story about your company.  They show profit (and losses), free cash flow or the lack thereof, debt levels, and all sorts of things that are important to any provider of credit.  Your financial statements are the lifeblood of your surety bond program and can make or break that next bid bond or final performance bond request.

Because financial reporting is very important to a surety company, the type and quality of the financial statements you provide is key.  We mentioned above that your performance bond program is constantly being evaluated.  In theory, the higher the level of financial reporting, the higher bonding capacity a company can expect to receive.  The last statement was qualified as there are other factors that ultimately determine your maximum surety bond capacity.  Meaning, a surety company is probably not going to provide a $2.5 million performance bond regardless of the level of financial reporting when the largest project you’ve completed is $250,000.  However, if you’ve completed a $2 million project in the past, an upgrading your financial statement from a CPA Compilation to a CPA Review (see below) can make all of the difference.

The different types of CPA prepared financials and what they mean to a surety

CPA Compiled – This type of CPA financial statement is prepared when the CPA has collected your books, records, etc. and compiled them into a balance sheet and income statement.  It also means the CPA has not verified any of your information such as cash balances, receivables, and other information which is valuable to an underwriter.  The CPA offers no assurances as to the accuracy of the financial statements.  As such, the surety company will often ask for cash verifications and aged receivable schedules to verify the amounts listed on your balance sheet.  A compilation is typically the least expensive method of financial statement preparation.

CPA Reviewed – A CPA reviewed financial statement is one that has been reviewed by a CPA.  The CPA performs checks by verifying bank statements and other financial information but does not perform many of the functions required of an audit.  These statements generally include notes to the financial statements regarding revenue recognition, receivables, loan information, and other important events.  The surety underwriter gains a greater understanding the company’s financials over a compiled statement as they consider a CPA reviewed financial statement more reliable and trustworthy.  However, although a CPA can offer certain assurances with a reviewed statement, they cannot express an opinion as to the fairness of the financial statements as a whole.  A reviewed financial statement’s cost varies depending on the detail and amount of work required.

CPA Audited – A CPA audited financial statement is the highest level of CPA preparation.  Various auditing techniques are performed by the CPA to ensure the financial statements are accurate and presented fairly.  The CPA will offer either an unqualified opinion, a qualified opinion, or an adverse opinion.  An unqualified opinion means the CPA believes the statements to be both accurate and in accordance with generally accepted accounting principles (GAAP).  A qualified opinion means the CPA feels that the financials are prepared fairly with the exception of scope limitation or limited departures from GAAP.  An adverse opinion means the CPA does not feel the financials are represented accurately.  A surety company gives the greatest weight to CPA audited financials because it has a high level of certainty the financials are accurate and reliable.

A final word on financial reporting and performance bonding

Timely financial reporting and quality financial statement preparation will help you maximize your surety bond capacity.  It demonstrates to your surety bond underwriter consistency, reliability, and trust.  These three items will do more to help establish and grow a surety company relationship than almost anything else.

New Overtime Laws – Why is everyone talking about them?

Earlier this month, the Department of Labor (DOL) issued a final ruling which updated existing overtime pay laws.  The new ruling changes the salary level required for executive, administrative, and professional (EAP) employees to be declared “exempt”.  Exempt status means the employee is not eligible for overtime wages regardless of the number of hours he or she works.  This change is important because it could affect your business and how your employees are paid.

New Overtime Laws – What changes were made to the existing laws?

The final ruling by the Department of Labor increases the salary or wage amount required for EAP workers to qualify as exempt.  In order to be exempted from overtime pay, the EAP employee must now make $47,476 or more annually or $913 each week.  No more than 10% of the annual wage may come from non-discretionary bonuses.

Additionally, the ruling also increased the exempt wage requirements for highly compensated employees to $134,004 annually.  These employees are defined as employees performing office or non-manual work earned above the previously mentioned annual wage.  Highly compensated employees must be paid at least $913 a week in salary or fees with the remainder of the annual wage paid via commissions, incentives, and non-discretionary bonuses.

New Overtime Laws – What’s the difference between discretionary and non-discretionary bonuses?

Non-discretionary bonuses are typically performance based such as hitting a certain level of production or meeting goals.  Discretionary bonuses are those that are awarded sporadically and are not usually tied to pre-existing performance related goals.  For example: A bonus given by a contractor to an employee for Christmas would be discretionary.  A bonus given by a licensed car dealer to an employee for hitting his or her sales goals would be non-discretionary.

Non-discretionary bonuses can be used to satisfy up to 10% of the $47,476 EAP salary requirement and up to 2/3 of the highly compensated employee wage level of $134,004 (subject to a minimum salary requirement of $913/week).  However, these bonuses must be paid at least quarterly if they are to be counted towards the minimum weekly wage requirements.  Otherwise, the bonuses will not county towards meeting the minimum wage requirements for exemption and they employee will most likely qualify for overtime pay.  Employers may make a “catch-up” payment retroactively in the following quarter to ensure the employee is paid enough to be exempted.  This payment does not apply to the current quarter’s wage requirements and only to the previous quarter’s requirements.

New Overtime Laws – What do they mean for your business?

While opinions vary, most will agree that the greatest effect the new ruling will have on a business is the increased accountability of the employer as it relates to tracking an employee’s work hours.  Until now, the exemption level for EAP’s was set at a weekly wage of $455 or $23,660 on an annual basis.  A large number of middle managers often met or exceeded the $23,660 level and were declared exempt.  The low exemption requirement was easily met by employers.  The increased exemption level of $47,476 now includes a larger number of employees who may no longer meet the overtime exemption requirements.

New Overtime Laws – Tracking employee hours

Employers must now make the decision to increase wages to ensure these employees can be declared exempt or closely monitor their hours to avoid paying costly overtime wages.  Regardless, it’s always been the responsibility of the employer to keep an accurate track of the hours worked by an employee.  This is true for those employees who are considered exempt, non-exempt, and whether they are paid an annual salary or hourly wage.  Employers paid little attention to tracking the hours of exempt employees in the past knowing they would easily meet the low wage exemption threshold.  The increased wage exemption level in the 2016 ruling now forces employers to monitor these hours or possibly incur higher wage costs.

New Overtime Laws – What happens next?

The effective date of the new ruling is December 1^st, 2016.  The goal is to give employers time to analyze the new exemption requirements and react accordingly.  Reactions to the new rule vary from employers who believe the new requirements will stifle job creation and employees who believe they’ll finally be paid a fair wage for the amount of hours they work.  The only known factor in the equation is that change is coming and both employers and employees must adapt to whatever outcome it brings.

For more information, please consult the Division of Labor website regarding the updated regulations of the Fair Labor Standards Act.  This article is not to be construed as legal advice and we highly suggest you contact the Division of Labor to ensure your compliance with the new laws and regulations.

Who needs an Alabama Car Dealer License?

Section 40-12-390 of Alabama State Code requires all new and used car dealers, motor vehicle wholesalers, rebuilders, and conditioners to obtain an Alabama car dealer license.  Additionally, motorcycle dealers and those companies selling trailers subject to titling must also register as a motor vehicle dealer in Alabama.  Each license type is summarized below:

• Alabama used car dealer license – required of any person or entity who is engaged in advertising, selling, buying, or negotiating for sale five or more motor vehicles in one calendar year.  This does not include those companies offering rental or leased vehicles.  This license now includes motor vehicle rebuilder and wholesale dealer licensees as it relates to used motor vehicles.
• Alabama new car dealer license – required of any person or entity who has a contract with a vehicle manufacturer or franchise and advertises, sells, buys, or negotiates for sale more than five vehicles in a calendar year.  This license now includes motor vehicle rebuilder and wholesale dealer licensees as it relates to new motor vehicles.
• Alabama motor vehicle rebuilder license – required of any person or entity who modifies or makes repairs to any motor vehicle which then requires a new ID to be issued by the Alabama Department of Revenue.  This license is also required of those individuals or entities who refurbish motor vehicles for sale under the same ID.  This license type is now included under the Alabama used and new car dealer licenses.
• Alabama motor vehicle reconditioner license – required of any person or entity who is in the business of refurbishing, repairing, or replacing damaged parts of a motor vehicle with the intent of selling the motor vehicle.  This license is now included in the definition of an Alabama motor vehicle rebuilder.
• Alabama motor vehicle wholesaler – required of any person or entity who sells vehicles directly to dealers and entities other than the public.  This license type is now included under the Alabama used car dealer license and new car dealer license types.

You probably noticed that the new and used car dealer licenses now include motor vehicle rebuilders and wholesale dealers.  In 2014, Alabama included these license types which no longer made it necessary for a used car dealer to purchase and additional wholesaler license or a new car dealer to purchase a rebuilder license in additional to their new car dealer license.  The purpose of this was to eliminate multiple license types from being required by the same person or business.  The reconditioner license category was also eliminated and now falls under the motor vehicle rebuilder license.

How do I get an Alabama Car Dealer License?

Applying for you Alabama Car Dealer License is easy!  Please review the steps below:

• Step 1 – Visit the MVTRIP website at https://dealerlicense.mvtrip.alabama.gov/ and click on Register for New Account.
• Step 2 – Enter your name, email, desired username and password, then click Submit.
• Step 3 – Log into the website mentioned above using your username and password.
• Step 4 – Click on Start New Application/Renewal
• Step 5 – A pop up window will appear asking if you have previously been issued a license.  If this is a new license application, click No, enter your business name, and then click Continue.
• Step 6 – Click on the appropriate Alabama car dealer license type. Note: The wholesale and rebuilder licenses are automatically selected/included when new or used motor vehicle dealer types are selected.  Click Save to save your selection.
• Step 7 – Complete the business, contact, liability insurance, and bond information sections.  You do not need to enter your liability insurance information if you do not yet have a policy in place.  Click Save to save your information.
• Step 8 – Add information about all owners, partners, and members in the Representative section by clicking on Add New Representative.  You must click confirm after each representative’s information has been completed.  Click Save to save your information.
• Step 9 – Add your dealership location(s).  You must click confirm after each dealership location has been entered.  Click Save to save your information.
• Step 10 – Enter your payment information if using a credit card.
• Step 11 – Click the check box which indicates you have read and acknowledged the agreement.
• Step 12 – Type your name in the electronic signature box and click Submit.
• Step 13 – Confirm the information entered is correct by clicking Confirm in the pop up window.
• Step 14 – Click on the link which says “Click here to print your documents”.  IMPORTANT: You still need to sign and submit your documents to the Alabama Department of Revenue before your application is considered even if you submitted the electronic application.
• Step 15 – You will receive an email from the Department of Revenue if you have been approved or need to submit additional documentation.  New Alabama car dealers will always need to forward the additional information listed below along with the printed, signed application:
  • An original Alabama motor vehicle dealer surety bond in the amount of $25,000;
  • Completed insurance certification form;
  • A photocopy of the driver’s license or ID for each representative listed in Step 8; and
  • A picture of your lot signage and the lot itself.

What if my Alabama Motor Vehicle Dealer License application is rejected?

Most new Alabama motor vehicle license applications are rejected because any or all of the items in Step 15 above were not sent with your printed application.  You must provide this information in order to obtain your dealer license.  However, you can always visit MVTRIP website and modify your application if changes are needed to the location, representatives, etc.  You will need to reprint and send your application to the Department of Revenue if changes are made.

How long is my Alabama Dealer License active?

All Alabama dealer licenses must expire on September 30th of each year.  This is true even if your license was issued on or after October 1st of the current year.  The expiration date is set by the state and cannot be changed.

How much will my Alabama Motor Vehicle Dealer License cost?

The cost of your license will be $25 for each license type needed.  Remember, motor vehicle rebuilder and wholesaler licenses are automatically included in under new and used motor vehicle dealer license designations (i.e. no additional fee is needed).  Other costs to consider are registering your business with the state of Alabama, your surety bond cost, and other insurance costs.

What is the Alabama Motor Vehicle Dealer Surety Bond?

The Alabama motor vehicle dealer surety bond is a type of insurance product required to obtain your license.  The bond protects consumers from financial harm caused by your dealership should you be unable to reimburse the consumer for their loss.  Please visit our Alabama motor vehicle dealer bond page for more information.

How long will it take to receive my Alabama Dealer License?

This depends on the state but can be issued quickly if all of the required information is submitted.  Generally, the state will review each application in 5-10 business days and respond with either an approval or rejection of your application.  Rejected applications often cause delays which result in additional time needed to obtain your license.

Helpful Alabama Motor Vehicle Dealer links

Alabama Department of Revenue
Motor Vehicle Division – Dealer Licenses
PO Box 327643
Montgomery, AL 36132-7643
Phone: 334-242-9000
Email: dealerlicense@revenue.alabama.gov
Web: https://dealerlicense.mvtrip.alabama.gov/

Who needs to register as a California travel agent?

All travel agents in California must register with the CA Attorney General prior to operating as a travel agency in the state.  A travel agent is any person or business who sells, arranges, or advertises they can sell or arrange the following:

• Flights or cruises; or
• Land or water transportation which exceeds $300.

Do I still need to register if my travel agency isn’t located in California?

The answer is yes if you market to California residents or market California tourist destinations.  This includes advertising trips to Disney World, Yosemite, and other popular CA destinations.

How do I apply for a California seller of travel license?

Step 1 – Complete the California Seller of Travel Registration Application

Step 2 – Return the completed application with your registration fee to:

Seller of Travel Program
Office of the Attorney General
Department of Justice
300 South Spring Street, Suite 1702
Los Angeles, CA 90013-1230

Step 3 – Receive your California Seller of Travel Certificate in the mail (typically in 1-3 weeks).

Can you help me apply for my CA seller of travel license?

Please visit thelicensecompany.com for help applying for your license.  They’ll take you from start to finish, help you complete the app, and ensure you have all the required documentation.  The licensing process is confusing and they often obtain state licenses faster and easier than going it alone.  The cost is $199 and they can also assist with other state filings, if needed.

What does the California travel agent license cost?

The cost of your travel agency’s license depends on a few things.  The first factor is the number of locations you intend to have.  The cost to register as a CA travel agent is $100 per location.  For example: An agency with 1 location would pay a registration fee of $100, an agency with 3 locations would pay a registration fee of $300, and so on.

Do I need to pay a late fee?

The attorney general may require payment of a late fee in addition to your registration fee.  However, this depends on your agency’s filing deadline date.  The filing deadline date is 10 days before you start doing business as a travel agency in California.  You are required to pay a late fee if your agency started doing business prior to the filing deadline.  The late fee is calculated by finding number of days difference between the date you started doing business and the date your application was sent (postmarked).  For example: Let’s say your agency began selling travel on Sept 1st and didn’t sent the license application until Sept 30.  The number of days difference would be 29 (30-1).  The late fee required by the state of California is $5 per day late.  In the previous example, the travel agency would be responsible for a $145 late fee in addition to their registration fee (29 days x $5/day).

The maximum amount of late fees charged by the state cannot exceed $500 per year.  The most important term in the previous sentence is “per year”.  Meaning, if you’ve been doing business as a travel agency for multiple years, you could be charged up to $500 in late fees for each year.  This is why a timely registration is so important.

Lastly, many late registrants may feel the urge to “cheat” on the date they started doing business to avoid paying the fine.  This isn’t a wise choice as it could end up in the denial or revocation of your license.  The California seller of travel application authorizes the state to inspect any and all records of your travel agency upon request.  This includes financial statements, bank records, and other items which will ultimately show the true date you started doing business as an agency.

What happens if I don’t register my travel agency?

Failing to register your travel agency can have serious consequences.  You could receive a cease and desist order from the state which would bar your agency from selling travel.  In turn, this could lead to fines, fees, and possibly the denial of a license in the future.

What is the CA Travel Agency surety bond requirement?

The California seller of travel surety bond requirement is meant to protect consumers.  The surety bond acts as a safeguard against the mishandling of your customer’s money.  Your customer’s generally pay up front for certain travel packages.  Typically this payment includes the actual cost of travel plus a commission for your agency.  CA law says you cannot spend the money held in trust for your client’s purchases on operating expenses such as salaries, etc. unless a surety bond is in place.  Please visit our California Seller of Travel Bond page to learn more about the requirement.

How do I contact the state for questions about my application and its status?

Phone: 213-897-8065
Fax: 213-897-8846
Email: sellers.travel@doj.ca.gov

Who needs a Florida Agricultural Dealer License?

A Florida agricultural dealer license is needed by most resellers of agricultural products.  Any reseller of agricultural products who pays for those products with anything other than a cashier’s check, cash, wire transfer, debit card, or similar cash transaction is required to obtain a license and surety bond.  Further, Florida says any business or individual in Florida who handles, buys, or negotiates ag products for resale must be licensed by the Florida Department of Agriculture.

Who is exempt from the Florida Agricultural Dealer License requirement?

While Florida requires most dealers of agricultural products to obtain a license, some individuals and businesses are exempt.  They include:

• Farmers who sell their own agricultural products;
• Resellers/Dealers who sell less than $1000 in products per year;
• Bonded license holders under the Packers and Stockholders Act; and
• Agricultural dealers who use cash or cash equivalents for their purchases.

Individuals or businesses who do not meet the exemption criteria and operate without a license may receive a cease and desist letter or fine from the state.

How much does a Florida Agricultural Dealer License cost?

The cost of your license will depend on the surety bond amount deposited at the time of issuance.  Listed below are the application costs:

• $5,000 – 9,999 bond amount = $170 license fee
• $10,000 – 14,999 bond amount = $230 license fee
• $15,000 – 100,000 bond amount – $300 license fee

The surety bond amount needed is calculated by multiplying your highest monthly gross sales volume or expected volume for new businesses by two.  Visit our Florida Agricultural Dealer Bond page to learn more about the bond requirement.

How do I get a Florida Ag Dealer License?

Getting your Florida ag dealer license is surprisingly easy!  Here are the steps:

1. Complete the Florida Agricultural Dealer Application;
2. Obtain a Florida Agricultural Dealer Surety Bond; and
3. Send the application and bond to the Department of Agriculture.

Your application may take anywhere from one to three weeks to process.

How do I contact the Florida Department of Agriculture?

You may contact the FL Dept of Agriculture and Consumer Services by calling 1-800-HELPFLA or by mail at the following address:

FDACS
PO Box 6700
Tallahassee, FL 32314

Why Contractors Succeed

Too many times we read about how and why contractors fail in business but very few times do we read about why they’re successful.  Maybe it’s because “doom and gloom” articles typically generate more interest than those which speak of one’s success.  After all, our society seems to love tearing people down more than they do building them up.  Which is why, in this article, I’d like to highlight how and why contractors succeed.  Of course this isn’t a surefire roadmap to success but a brief overview of what contractors are doing not only to survive but also thrive in the industry.

Stick With What You Know

Let’s start with the most obvious factor which is: Stick with what you know.  Successful contractors are those who focus on their core competencies and rarely jump from one type of construction to another.  For example: A successful paving company is one that generally focuses only on paving.  A successful HVAC contractor is one that focuses primarily on heating, ventilation, and air conditioning.  Why?  Because they’re good at it and understand the intricacies of their chosen trade.  How successful do you think the HVAC contractor would be at paving a parking lot or road?  Not to say it couldn’t be done but it’s highly likely that the paving contractor could perform the road or parking lot work much more efficiently than the HVAC contractor.  Successful contractors generally focus on what they do well.

Stair-Step Growth

Now let’s look at project size.  Most successful contractors are the result of properly calculated risks when looking at a project’s size and scope.  Let’s say a contractor’s largest project was $1 million but there’s an opportunity to bid on a $10 million project.  Some would say the only difference between the $1 million and $10 million projects are mainly more materials and more labor.  In theory, that could be correct.  However, the successful contractor looks at this situation a little differently.  The successful contractor realizes that the $10 million project is a huge risk which could lead to default.  They understand the need for liquidity and cash flow is critical to the project’s success.  They ask questions such as: Do we have a bank line in place to support immediate cash flow needs?  Do we have enough personnel to complete the project within budget and the necessary time frame?  What happens if we’re slow-paid?  Will the cost of materials increase and do we have an escalator clause in our contract?  Successful contractors realize that slow calculated growth is much less dangerous than “elephant hunting”.

Cash Flow is King

In the previous paragraph, we touched a little bit on the importance of cash flow.  Managing cash flow is one of the most important factors in the success of a contractor.  However, cash flow can be affected by more than just the availability of a bank line.  A contractor must constantly monitor cash flow in order to operate efficiently and meet its short and long term cash needs.  Factors such as bad obligee or owner, subcontractor failure or faulty workmanship, and many others all affect cash flow.  Successful contractors must be aware of slow-paying or difficult owners and lackluster subcontractors.  Fortunately, it doesn’t take long for bad experiences to circulate within the industry especially when the project requires a performance and payment bond.

Cautious Optimism

Finally, successful contractors generally focus on one geographic area and expand into other geographical areas with caution.  For example: A contractor has a successful track record when performing work in the Southeast US.  Projects are completed on time, within budget, and are profitable.  A large project then comes up for bid in the Northwest.  The successful contractor will only pursue the project after it’s been carefully vetted.  The lack of knowledge about the area including weather, soil conditions, mobilization, subcontractors, and municipalities/code compliance all present a large risk to the contractor.  In most cases, the successful contractor will pass on the project or enter into a joint venture agreement with a local company in the Northwest to mitigate some of the risk attributed to the lack of knowledge.  Only after completing several projects within the Northwest will the successful contractor attempt to acquire work on its own and pursue larger projects within the geographic area.

The preceding paragraphs offer only a few traits of successful contractors.  Many more traits such as experienced management, continuity, and others exist.  Furthermore, there are contractors who are successful despite making some of the mistakes listed above.  The goal of this article is not to provide a fool-proof road to success but to stress those factors which have been material in helping other contractors along the way.

Who needs an Oregon Contractor License?

Generally, anyone who is paid for construction activities leading to the improvement of real property is required to obtain and Oregon contractor license.  There are some exceptions which are generally limited to handymen performing projects with a contract value of $1,000 or less, gutter cleaning, and pressure washing.

Do I need an Oregon Contractor License Surety Bond to get my license?

Yes, you will need a surety bond in order to obtain your construction license.  The bond is specific to the state of Oregon and the amount required varies depending on your construction license type.  You can learn more about the surety bond requirement by clicking here or continuing to read the licensing guide below.

What Oregon Contractor License type do I need?

There are many Oregon contractor license types available and it’s important that you apply for the the correct license type.  A brief description of each contractor license type and the contractor license bond amounts needed are listed below:

How do I get my Oregon Contractor License?

Step 1:  Determine the type of structure you intend to build or modify as a licensed contractor.  The three classifications of structures are listed below along with a brief description:

• Residential Structures – These structures are site-built homes, individual condominiums, manufactures homes, and other structures containing one or more units which are four stories or less.  Examples of residential structures include but are not limited to single family homes, apartment complexes, or individual residences located in a multi-story building.
• Small Commercial Structures – These structures must be non-residential in nature, no more than 20 feet tall, less than 10,000 square feet, and most other commercial structures meeting the previously mentioned requirements with a total contract value less than $250,000.  Examples of small commercial structures include but are not limited to convenience stores, gas stations, and fast food restaurants.
• Large Commercial Structures – These structures are any other structures which are not defined as residential or small commercial.  However, small commercial structures with a total contract price which exceeds $250,000 are also considered large commercial structures.  Examples of large residential structures include but are not limited to hospitals, parking garages, and apartment complexes exceeding four stories in height.

Step 2:  Designate a responsible managing individual (RMI) for you company.  The RMI should be an owner or employee of the company in which you intend to license.

Step 3:  Have your RMI complete the necessary 16 hours of pre-licensing training.  You can find a listing of approved pre-licensing trainers by clicking here.  The training should include business law and best practices.  Additionally, you will want to ensure the cost of your pre-licensing training includes the Oregon Contractor Reference Manual as it will be needed for your Oregon Contractor License Exam.

Step 4:  Schedule and pass the Oregon Contractor License Exam.  The exam must be scheduled with PSI Services, you must complete the pre-license training prior to scheduling it, and the cost of the exam is $60.  The exam consists of 80 multiple choice questions and is an open book test.  You must answer 56 of the 80 multiple choice questions correctly to receive the passing grade of at least 70%.  The maximum allowable time to complete the exam is 3 hours.  Again, the exam is open book and you will want to bring your Oregon Contractor Reference Manual for reference.

Step 5:  Complete the state contractor license application.  A copy of the application can be found here.

Step 6:  Apply for and purchase your Oregon Contractor License Surety Bond.  You can apply for the bond online by using our easy-to-complete Oregon Contractor License Bond application.  It takes minutes to apply and quotes are returned in minutes.  You can learn more about the surety bond requirement by visiting our Oregon Construction License Bond page.

Step 7:  Purchase the required amount of general liability coverage for your license type.

Step 8:  Get your Oregon contractor license!  You’ll need to supply a copy of your Oregon Contractor License Exam score, completed contractor license application, application fee, certificate of liability insurance, original surety bond to the Oregon Construction Contractors Board.  The board will then issue your construction license.

How much will it cost to get my Oregon Contractor License?

The cost of obtaining your Oregon contractor license will vary depending on your license type.  Your surety bond cost will typically be about 1% of the bond amount needed (i.e. $10,000 bond = $100 cost).  The cost of your general liability insurance will vary depending on the type of construction being performed and the amount of coverage needed.  However, here are your fixed costs for obtaining your license:

• Pre-license Training – $125-150 (includes manual)
• State Construction License Exam – $60
• State Construction License Application Fee – $325 (2 year term)

Other construction license types have lower application fees than the traditional construction licenses.  Those fees are listed below by license type:

• Home Energy Assessor Application Fee – $100
• Home Inspector Application Fee – $150
• Lead-Based Paint Inspector Application Fee – $50
• Locksmith Application Fee – $60

How long will it take to get my Oregon Contractor license?

The licensing process can be completed at your pace but you must obtain your Oregon Contractor License within 24 months after completing your pre-license training.  However, you can expect to obtain the license roughly one week after completing your pre-license training if you make it a priority.

What are the NJ HVAC license requirements?

All new NJ HVAC license applicants must meet one of the following guidelines prior to applying for your license:

• Five years of employment/work experience in the HVAC field which includes the following:
  • Four years in an HVAC apprenticeship approved the US Department of Labor;
  • One year of employment as an HVAC journeyman;
• A bachelor’s degree specializing in HVAC from an accredited university recognized by US Department of Education and one year of experience installing/servicing HVAC units.

Each guideline listed above must also include education, either on the job or in the classroom, in proper chlorofluorocarbon management and other refrigerants not to exclude other high global warming potential gases.

What are the exceptions to the NJ HVAC license requirements?

If you already hold a professional construction license in New Jersey, you may qualify for one of the exemptions listed below:

• Individuals such as architects, plumbers, electrical contractors, etc. who already hold a professional license and are practicing in the within the scope of their profession;
• Chimney sweeps practicing in the scope of their profession;
• Home owners self-performing work on their residence with the exclusion of work including CFCs of HCFCs;
• Licensed master plumbers who are repairing, servicing, or maintaining:
  • Boiler systems, piping, thermostat controls, underground storage tanks and pneumatic controls.
• Licensed Electrical Contractors who are repairing, servicing, or maintaining;
  • Electrical heating equipment or the electrical components of equipment used for HVAC.

How much will it cost to obtain my NJ HVAC license?

The cost to apply for your initial NJ HVAC license is $160 plus $25 for your pressure seal issued with your license. The NJ HVAC license renewal fee is $160 and will need to be paid every two years prior to the expiration of your license.

How long will it take to get my NJ HVAC license?

The review board will meet once a month to review and approve/deny NJ HVAC license applicants. Once approved, you will be contacted by the state. Your license and pressure seal should be received within 15-20 days after you have been approved by the board, received your approval letter, and paid the application fee mentioned above.

When does my NJ HVAC license expire?

The current term of NJ HVAC license is from July 1, 2014 to June 30, 2016. After June 30, 2016, your license will renew every two years on July 1.

Where can I find the NJ HVAC application and exam site?

You can find the application by visiting the New Jersey Division of Consumer Affairs’ website. Additionally, you will also find tips for your application and frequently asked questions.

What else do I need to obtain my NJ HVAC license?

Once you have passed the state exam, you will need to post a $3,000 NJ HVAC Contractor License Bond. These bonds are easily obtained and run concurrent with your licensure period.  Additionally, you will need to obtain an EIN number which can learn more about and apply for by visiting the IRS website.

What if I have my HVAC license in another state?

You may be able to waive the exam requirement if you currently hold an HVAC license in another state. However, you must prove to the NJ State Board that you have completed similar education requirements to those listed above, proof that your state honors the same licensure to NJ HVAC license holders, proof of your current license in that state, and an application.

Who needs to register as a Washington Seller of Travel?

Most travel agencies who offer or advertise for sale travel and tourism activities in Washington will need to register with the WA Business Licensing Service.  However, certain business are exempt and the Washington Seller of Travel license exemption should be confirmed with the state prior to engaging in any activity such as selling or advertising for sale travel and travel related activities.  In most cases, an out-of-state seller of travel must also register with the state of Washington as well.

Why do I need to register as a Washington Seller of Travel?

Washington State RCW 19.138.010 Legislative Finding and Declaration states that some travel agencies have caused a financial hardship to the citizens of the state through unfair advertising and business practices.  Because the tourism industry has a sufficient impact on Washington’s economy, the legislature sought to regulate and establish standards for the industry in order to encourage fair business and advertising practices.  As such, the industry is regulated by the state and requires registration to become a travel agent in Washington.

How do I register as a Washington Seller of Travel?

Applying for your Washington Seller of Travel license can be achieved by:

• Complete the Washington Business License Application (this can also be filed online at http://bls.dor.wa.gov/file.aspx);
• Complete the Sellers of Travel Registration Addendum;
• Provide the appropriate financial responsibility option such as the Washington Seller of Travel Surety Bond;
• Submit the Washington Business License Application, Sellers of Travel Registration Addendum, and the Washington Seller of Travel Bond or other financial responsibility option to:
  • State of Washington, Business Licensing Service, PO Box 9034, Olympia, WA 98507-9034

How much does it cost to obtain my Washington Seller of Travel License?

The Washington State Business License Application filing fee is $19.  There is an additional $5 fee for each trade name (i.e. DBA) being used.  The Sellers of Travel Registration Addendum fee is $202.  All fees must be paid at the time your application is filed.  Additionally the Washington Seller of Travel Bond cost is determined by your personal credit score.  You can learn more about the surety bond’s cost by visiting our Washington Seller of Travel Bond page.

How long does it take to become a Washington Seller of Travel?

The length of time it takes to become a Washington travel agent is largely determined by the information contained in your application and the time it takes the state to process it.  A complete application can be approved in as little as two weeks.  Incomplete applications or those travel agents who choose use the paper form of the Washington Business License Application can take up to four weeks.

Are you serious about getting your license?

If so, consider using a professional licensing firm like The License Company, LLC.  These firms can often get your travel agency licensed much faster than going it alone.  Look to spend no more than $200 to have your license application prepared by a professional company.

Who needs a Surety Bond?

Surety bonds are required of many businesses especially those industries regulated by a local, state, or federal government.  If your business requires a license to operate on the state or federal level, there’s a good chance you may need a bond.  Additionally, if you’re a contractor performing large public or private projects, you will also need bonds prior to the contracting being awarded to your firm.

What types of Surety Bonds are there?

There are thousands of different bonds required for various licenses and projects.  The most common are car dealer bonds for auto dealers, performance and payment bonds for contractors, seller of travel bonds for travel agents, and many others.  However, surety bonds fall into four main categories which are license bonds, contract bonds, court bonds, and everything else.  You can find more information on each class of bond by visiting our surety bond type page.

How do I get a Surety Bond?

Obtaining a surety bond is relatively easy depending on the bond type, amount, and your personal credit history.  Most license bonds can be obtained based on your personal credit score.  The contractor bond application process is a little more intensive as the bond amounts are usually large.  They require an application, credit report, business and personal financials, and additional information related to the construction company and its experience.  Court bonds such as probate surety bonds required an application, credit check, and appointing court documentation.  The information required for miscellaneous bonds varies but is typically limited to a credit check depending on the bond amount and type.

How do I apply for a Surety Bond?

Applying for a surety bond today has never been easier.  There are multiple ways to apply including an online surety bond application or a .pdf application which can be printed and completed at your convenience.  These applications require basic information about the business, bond type, and ownership structure.  Once the application is complete, it will need to be submitted to your surety bond agency who will then approve your surety bond via email or phone.

How long will it take for my Surety Bond approval?

Most bonds can be approved within minutes of receiving your completed application.  This is because surety bond agencies have developed special programs and acquired in-house underwriting authority which allows them to approve your bond without waiting for a response from the surety insurance company.  Other bonds which are larger in amount or higher in risk may require additional information such as business financial statements may take longer.  Performance and payment bonds are generally not approved the same day due to the complexity of the request.

What happens after my bond is approved?

You will receive a surety bond quote along with an indemnity agreement.  Once you’re ready to proceed, the indemnity agreement will need to be signed by each business/individual listed.  It will then need to be emailed, faxed, or mailed to your bond agent.  Additionally, an invoice will then be issued and be paid online via credit card for immediate issuance.  Once both items are received, your bond will be issued immediately.

When will I receive my Surety Bond?

You will receive a copy of your surety bond via email once it has been processed.  The original bond will then be sent to the address listed on your surety bond application.  Most surety bonds will be sent via US Mail unless expedited service is requested.

What should I do when I receive my original bond?

Most entities who require a bond will need the original bond with a “wet” signature, power-of-attorney, and a raised/digital seal.  Your original surety bond will contain all of these requirements after it’s processed by your surety bond agency.  The original bond will need to be signed by the individual listed on the bond and may need witnessed and/or notarized.  You must then submit the original bond to whomever is requiring it along with any additional documentation they require.  However, some entities are now accepting scanned, signed copies and you will want to confirm whether a scanned copy is acceptable to them.

What will my Surety Bond cost?

Your bond cost will largely be determined by the personal credit score of the business owners.  Most surety bond premiums will fall in between 1-3% of the total bond amount needed for those applicants with good credit.  However, if credit issues exist, applicants should expect to pay between 4-10% of the bond amount needed with few exceptions.

What Surety Bond amount do I need?

Your surety bond amount is determined by the department or obligee who is requesting it.  In many cases, the amount of your bond will be static and the same amount required of all other businesses in your industry.  However, some bond amounts vary depending on the annual revenue or your business, number of locations, or other factors.  It’s best to verify the bond amount needed with the entity requiring the bond to avoid any delays in receiving your license or contract.

What if I have bad credit?

Previously, bad credit surety bonds were unobtainable for applicants with credit issues as they were reserved for those applicants with a good credit history.  This has changed over the past few years with many surety insurance companies offering bond approvals regardless of credit score.  However, bad credit surety bonds generally cost more than those written for individuals with good credit.  You can read more by visiting our bad credit surety bond page.

If you have any questions, please email us at info@dblsurety.com or call 3863162547 and one of our surety bond representatives will be glad to assist you.