- April 20, 2017
- Posted by: Surety Bond Experts
- Category: Bond Approval, Business plans, Business Service Bonds, Surety Bond, Surety Bond Producers, Surety Bond Rates, Surety Bonds
What causes a surety bond to default? Off the top of your head, you may think of failure to follow contractual obligations. Or you thought of the horrors of having a claim filed. But there are other factors which also may be hurdles in complying with your surety bonds.
Unforeseen financial hardships
These scenarios are tough to overcome, because they are rarely planned for. Some examples could be an unexpected death in the family, divorce or major home renovation. Let’s meet Phil. Phil has started his very own business. Money is tight, but he has saved up enough to launch his dream business. He takes a leap of faith, but all of a sudden, the perfect storm hits. His house is in the path of a huge molasses flood (look it up! It happened!) He is in the red, both with his business and his personal life. He is now faced with defaulting on his surety bond.
Not having enough experience
Phil’s neighbor, Louise wants to start her own business. Phil inspires her with his drive and ambition. A surety bond producer approves her and she is able to start working in her dream industry. Although Louise is knowledgeable about her industry, she has never run a business. The business side baffles her. She is not able to get her business up and running and is also in danger of defaulting on her surety bond.
Lack of funds
Both Louise and Phil took a leap of faith in their dream and used all their savings to start their own business. It is the American Dream and one we all have seen on the Big Screen. But for every Hollywood success story, there are many who are not successful. Phil and Louise both ran into one of the biggest killers of the American Dream: lack of funds. Phil did not have enough funds to rebuild after the huge molasses flood. Louise was unable to hire someone to run the business side of her dream. Because of this, they both defaulted on their surety bond and now have a red mark against them.
But don’t worry, Phil and Louise were able to pick themselves up by their bootstraps. Although it took them a while, they rebuilt their businesses. They regrouped, began applying for surety bonds with higher premiums. They were able to prove to their surety bond producers that they had simply come on hard times, but that they were still trustworthy business people.
We here, at GotSuretyBonds.com are an independent bond-only agency, committed to the principles of service, integrity and professionalism. We view our clients, employees and underwriters as our “business family”. We strive to offer each and every one of them unsurpassed attention and support to ensure a mutually beneficial relationship. We have a keen understanding that success for everyone is only possible through helping all of our constituents achieve their goals and objectives, we believe that a truly satisfied customer, employee or vendor is the best business strategy of all. Our surety bonding services help create a blueprint for success. Our principals have relationships nationwide and have earned the trust of underwriters. Because of our credibility within the underwriting community and longevity in the industry, we are able to act as powerful advocates for our clients. We have a unique, tactical process to professionally design and present a thorough financial picture with risk and financial analyses to the surety market.