First Bonds for New Contractors

What is FirstBond™?

FirstBond™ provides new and emerging contractors access to performance bonds, labor and material payment bonds, bid bonds and surety letters of prequalification for contracts of up to $1,000,000 in value.

FirstBond™ is a solution developed by FCA as an answer to the needs of new and emerging contractors. In our experience, new and emerging contractors often have the most challenging time securing construction bonding. It is our belief that having a surety expert by your side can not only help you secure the right surety solution but can act as a resource for your business as you grow.

Who Needs FirstBond™?

Have you ever been declined your first bond? Are you a new or growing business? Are you a business that is starting to tender public work for the first time? Do you currently pay for every bid bond or agreement to bond? If you answered yes to any of these questions then the FirstBond™ program is perfect for you.

The FirstBond™ program is targeted to contractors who have opened new construction businesses or are emerging contractors looking to build their business and tackle more bonded public work.

It is designed to make the process transparent, easy and efficient so that contractors can focus on what is important; growing their business.

How Much Does FirstBond™ Cost?

The cost to set up a FirstBond™ facility is between $1,500 and $3,000. This fee is charged annually and covers all the bid bonds, agreement to bonds and prequalification letters that your business requires in a twelve-month period.

In addition, if a project owner awards your business a project and requires you to post a performance bond or labor and material payment bond then a premium would be charged. Depending on the size and type of bond required, this premium can range from 0.7% to 1.5% of the contract value inclusive of tax.

What is the Process to set up a FirstBond™ Surety Facility?

The process to secure a surety facility with FirstBond™ is quick and easy. It starts with a phone call with a representative of FCA who can provide further details on the FirstBond™ program and ensure that you are getting the right solutions for your business.

The FCA Advisor will advise you of any requirements but the basic information required to set up a FirstBond™ facility includes:

1. A Notice to Reader Year-End Financial Statements for the Business
   • Including Aged Accounts Receivable and Accounts Payable Listings
2. FCA’s Personal Net Worth Statement for the Owner(s)
3. FCA’s Contractor’s Questionnaire
4. Bank Reference Letter
5. Professional Resumes for the Owner(s)

The surety is looking to understand both the corporate financial position of the company and the owners, any history of bankruptcy or litigation and an understanding of the history of completed work and future business plan of the operation.

In our industry, we call these items the 3 C’s of surety. Character, Capacity and Capital.

1. Character is the history, expertise and reputation of the business owners.
2. Capacity is the ability to complete the work the business expects to tender. This includes review of previous completed jobs, what systems are in place for estimated, project management and accounting and whether the business has the equipment needed to complete the work. Lastly,
3. Capital is the financial side of the equation. This looks at the corporate financial statements, profitability and the owners personal financial health.

An assessment of Character, Capacity and Capital are what helps the surety decide if they are going to provide a bond facility.