A company’s financial statements are the underwriters next consideration. Like loan officers at a bank, a surety company underwriter weighs your financial statements very heavily when determining whether you represent a risk of loss. Again, surety bonds are a credit facility, and the surety company wants to make sure that your company is good on any losses that might be sustained. On the assumption of zero risk, the underwriter is charged by the surety company with making sure that a company … [Read more...]
Surety Programs and Financial Statements – Part 2
In the previous blog post, we discussed one area in which accrual basis financial statements are different than a tax basis statement. If your accountant is providing you with only an income tax basis financial statement for your bond applications, that income tax basis statement almost always understates your company’s financial strength and performance. The treatment of tax depreciation schedules is another area that illustrates how these two different types of financial statements can … [Read more...]
Surety Programs and Financial Statements
As 2018 has drawn to a close, many contractors are working on their year-end financials. Your company may want to consider having your accountant prepare an accrual basis financial statement in addition to the standard income tax basis financial statement. This accrual basis financial statement can then be used with your bond application. If your accountant is providing you with only an income tax basis financial statement for your bond application remember this, income tax basis financial … [Read more...]
Times They Are A-Changin’
As the title of the famous Bob Dylan song says, Times They Are A-Changin’. And no one knows that better than the Green Bay Packers faithful. After their first losing season since 2008, the Packers’ owners have gone to work revamping staff and instituting a new game plan for 2018. The times may also be changing in the surety marketplace. For several years, strong profits, inexpensive reinsurance and competition in the surety underwriting business have worked to a contractor’s advantage. … [Read more...]
Year End Considerations and Solid Surety Programs
While a company’s year-end considerations are not a new blog topic for Goldleaf Surety (Surety Bonds & End of the Year Considerations-Part 1; Surety Bonds & End of the Year Considerations-Part 2; Surety-Oriented Considerations at Year-End; and Surety Program and Year End Considerations), it is a topic worth visiting this time of year. How a company deals with its year-end planning can have a significant impact on its bonding program moving forward. For this reason, we feel it is … [Read more...]
Surety Program and Year End Considerations
It's that time of year again to address how your company's year-end planning issues can affect your company's bonding program - both capacity as well as terms and conditions. The "quality" of year-end statements is a topic often discussed by Goldleaf Surety's Account Specialists with our clients. In our December 3, 2014, blog post Surety Bonds and Year End Consideration we discussed the "quality" of a company's year-end financial statements and how these can affect a company's surety … [Read more...]
Bonding Capacity and Financial Statements
Goldleaf Surety Services has always stressed to its clients the importance of year-end financial considerations. Beyond a history of consistent profitability and positive cash flows, surety companies focus a lot of their attention on equity and working capital to determine what level of surety support they are willing to extend. That is why Goldleaf Surety Services stresses to all of our clients the importance of a regular financial statement review as an important issue in maintaining or … [Read more...]