What are “Fast Track” Performance Surety Bond Applications?
Fast Track performance surety bond applications allow you to apply for a bond quickly and easily. Almost every surety company has one and they’re also referred to as Fast Bond, Quick’n’Ez, Emerging, and Express applications. Regardless of the name, they operate in the same manner for the most part. They allow you and your company to apply for smaller contract bonds without requiring mountains of underwriting information. In most cases, you only need to provide a signed application, copy of bond forms, and your contract if available.
Why should you use a “Fast Track” Performance Surety Bond Application?
As mentioned above, these performance surety bond applications make it easier to get a bond. They work great for one time bond needs or if your company needs smaller construction bonds under $500,000. All you need to do is complete the application and the surety company can approve you in less than 24 hours. However, in some cases, the surety company may require a business financial statement or tax return when your bond exceeds a certain dollar limit. Some surety companies ask for this information for bonds over $350,000 in value. Others require this information if your bond exceeds $250,000 in contract value. Regardless, these applications are a great way to start a bonding relationship. They’re also much easier than applying for a more formal surety bond line of credit.
Who should use a “Fast Track” application?
You should use these applications if your company doesn’t use bonds much or is just starting to bid on bonded jobs. Again, each application has its own requirements but if most of your work falls under $350,000 then these applications are a great starting point. Additionally, they’re a great way to begin a more formal bonding relationship with a surety company. This helps when you look at larger bonds which can’t be approved using the less formal applications.
Why do I need a performance bond?
It depends. In some cases, you’ll need a performance surety bond because it’s required by the Miller Act or a state’s Little Miller Act. These acts establish a certain dollar value in which a contractor must provide a bond on a public construction project. Prime contractors often require surety bonds from subcontractors before they begin working on a private project. This is usually because they’re surety company is trying to spread their risk to other surety companies. Lastly, the bank who is providing the financing for a project may ask a contractor to provide a bond. This generally ensures a project will be completed so they can foreclose on the property if needed.