What Are Performance Surety Bonds?
Performance Bonds are most commonly referred to as bid, payment, and contract surety bonds. These bonds are most often required of contractors performing work for local municipalities, the state government, and the federal government. However, there has been a recent trend whereas private owners and banks are now requesting performance bonds and payment bonds to secure their investment and avoid liens on private construction projects.
How much does a Performance Bond cost?
The cost of a performance bond ranges from 0.5%-4% and is a one time fee on most construction contracts. However, there are several other factors which determine your performance bond cost. In some cases, the surety company will charge a fixed rate per thousand dollars of contract value. For example: You have a $100,000 contract and the surety company charges 3%. Your performance bond premium would be $3,000 based on the $100,000 contract value. In other cases, typically for larger contractors and projects, the surety company will charge a “blended” rate. In this case, the surety company may charge you 2.5% for the first $100,000 of contract value, 1.5% for the next $400,000 in contract value, and 1% on the next $2 million in contract value. For example: A $2.5 million dollar contract would amount to $2,500 for the first $100,000, $6,000 for the next $400,000, and $20,000 for the next $2 million in contract value. The total premium due on the $2.5 million contract would $28,500 and your “blended” rate would be 1.14%. Another popular term used for this type of performance bond rating is called a “sliding scale” rate.
What’s the easiest way to get a Performance Surety Bond?
Luckily, DBL Surety has the ability to place your performance bond based on an application and personal credit only. This program applies for single bonds up to $350,000 and rates vary from 2.5%-3.5%. Requests are typically completed within 24 hours barring any requests for additional information based on the information completed in the application.
What if I need a Performance Bond larger than $350,000?
Performance bond requests greater than $350,000 will require additional additional information such as business financials, resumes, letters of reference, and other underwriting information in addition to an application. In some cases, you may need an upgraded CPA prepared financial statement. However, each case is different and performance bonds are evaluated on a per bond basis. Please contact us for more information regarding performance bonds larger than $350,000 and one of our surety bond representatives will assist you.
What Types of Performance Surety Bonds Do We Offer?
- Bid Surety Bond
- Contractor’s License Surety Bond
- Environmental Surety Bond
- Payment Surety Bond
- Performance Surety Bond
- Subdivision Surety Bond
- Supply Surety Bond
Please keep in mind that this surety bond listing is not all inclusive so please call us at 386-316-2547, email us at [email protected], or fill out our easy-to-complete online surety bond application if you don’t see your surety bond type listed!
Do you offer Bad Credit Performance Bonds?
We are able to offer performance bonds to individuals with minor credit issues. However, performance bonds are very difficult to obtain for contractors with poor business and personal credit scores. We do not offer surety bonds to contractors with unsatisfied liens, open bankruptcies, or open judgments.
Other helpful Performance Bond links
Read our article on Why Contractors Succeed.
How do I apply for a Performance Bond?
- Complete our online Performance Bond application, or
- Download and complete our printable Performance Bond application, and
- Receive your surety bond quote in minutes!