New York Debt Collection Agency Bond

New legislation was recently introduced that would require debt collection agencies to be licensed and post a surety bond, contract of indemnity, or an irrevocable letter of credit that must be payable to the people of New York. The bond amount would be based on the number of persons employed by the licensee. A $10,000 bond would be required for one to four employees; a $25,000 bond for five to nine employees; a $50,000 bond for 10 to 20 employees, and a $75,000 bond for 20 or more employees. The bond would secure the licensee’s compliance with the applicable law and the payment of all costs and penalties. The surety’s total liability would be limited to the face amount of the bond, regardless of the number or nature of claims made against the bond or the number of years the bond remained in force.

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US Government Hearing On Minority Contracting Issues

Last month, the Government Management, Organization and Procurement Subcommittee of the U.S. House Committee on Oversight and Government Reform held a hearing on minority contracting issues. The Subcommittee discussed existing federal programs for minority-owned business enterprises (MBE) and disadvantaged business enterprises (DBE), as well as the challenges that these businesses have faced. The testimony featured one panel including the Small Business Administration (SBA) and the Minority Business Development Agency of the Department of Commerce (MBDA), and representatives of minority and small business development divisions within the Departments of Transportation (DOT) and Defense (DOD) and the General Services Administration (GSA), and another panel of minority contractors.

The testimony of the federal agencies focused on what the agencies had done to help MBEs and DBEs and the continuing challenges the contractors face. Largely, the government witnesses focused on a lack of access to capital. David Hinson, National Director of the MBDA, which is an agency of the Commerce Department, noted that it is working on a surety bonding initiative with a goal of identifying $100 million in private capital through a public-private partnership and to grow to $1 billion over time.

The panel of minority contractors and legal experts included representatives from the Minority Business Enterprise Legal Defense Fund, Mid-Tier Advocacy, the Airport Minority Advisory Council (AMAC), the Associated General Contractors of America (AGC) and the Thelton E. Henderson Center for Social Justice at Berkeley Law. Most of these panelists stated that discrimination generally existed in all aspects of contracting, including contract formation, awards of contacts, bonding, insurance and credit.

Other key issues addressed during the panel of minority contractors were contract unbundling, multi-tier subcontractors counting toward small business participation goals, small business size standards and prompt pay requirements. In written testimony, the Minority Business Enterprise Legal Defense Fund noted that minority-owned construction firms were not able to meet bonding requirements, which constrained their participation in federal contracting opportunities. The written testimony stated that insurance brokers lack incentive to serve the minority construction firms, whose contracting opportunities are generally smaller in size.

Surety Bond Associates provides specialty surety bond services to small, minority and women owned contractors designed to eliminate the barriers that prevent them from accessing the financial resources necessary to actively compete.

Contact Us to learn more about our Surety Support Services

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Women-Owned Small Business (WOSB) Contracting Program

The long anticipated and landmark Small Business Act was recently passed, which authorizes federal contracting officers to specifically limit, or set aside opportunities for women-owned small businesses (WOSBs) or economically disadvantaged women-owned small businesses (EDWOSBs). Although the Small Business Administration has issued a final rule on the WOSB program, it will not be effective for several months.

To qualify as an EDWOSB or WOSB, the 51 percent ownership must be unconditional and direct. In addition, the management and daily business operations of the concern must be controlled by one or more economically disadvantaged women (for EDWOSBs) or women (for WOSBs).

WOSBs and EDWOSBs will be required to self-certify their status in the Central Contractor Registration (CCR) and the Online Representations and Certifications Application (ORCA) as other small businesses do, and will also be required to post certain documents to the WOSB Program Repository.

There are eighty-three NAICS codes designated as eligible for Federal contracting under the WOSB Program, of which forty-five in which WOSBs are underrepresented and thirty-eight in which WOSBs are substantially underrepresented. The anticipated award price of contracts eligible for this program cannot exceed $5 million in the case of manufacturing contracts and $3 million in the case of all other contracts.

Surety bond will be required on all construction contracts awarded over $100,000, and WOSBs are encouraged to get Prequalified for bonding ahead of time.

Surety Bond Associates makes it easy to get Prequalified. Simply Apply Online, or Contact Us TODAY!

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PA Trading Assistant Bonds

Governor Rendell signed a law on October 8, 2008 amending the Auctioneer and Auction Licensing Act to include the Trading Assistant Registration Act. This law went into effect December 8, 2008. Anyone selling personal property on behalf of others as a Trading Assistant or Consignment Broker on ebay or any other online internet bidding platform for a commission or fee is required to comply with this new law.

Trading Assistants must now register with the State Board of Auctioneer Examiners. This process is much simpler than traditional Auctioneers, and involves completing the registration application and obtaining a $5,000 surety bond. Trading Assistants will also be required to place monies in escrow, disclose their registration number on all transactions, provide written receipts, and will be subject to fines and penalties for failure to register or comply with the new law. A registered Trading Assistant appointed by the Governor will represent Trading Assistants on the State Board of Auctioneer Examiners.

We understand failure to be registered as a Trading Assistant carries a potential fine of up to $500, a prison term of up to three months, or both. A second offense or conviction carries a fine of up to $2,000 to $5,000, imprisonment of not less than one to two years, or both. The civil penalty includes a fine of up to $1,000.

Surety Bond Associates believes this relatively new law is a positive step, and will add a level of legitimacy and professionalism to the Trading Assistant industry, while at the same time give their trading partners peace of mind that online transactions are handled in a safe and secure manner.

For more information, check out our Trading Assistant Bond page, or Contact Us.

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Importance of Subcontractor Bonding

The Owner Prequalifed You…Did You Prequalify the Subcontractors?

Good question. The answer could mean the difference between a job well done and a job done well over budget. A well thought out policy for bonding subcontractors provides the general contractor with many benefits, including the prequalification services of the surety; the effects of indemnity; a positive impact on their own surety relationship; and the ultimate performance and payment protection offered by the bonds.

Surety Bond Associates provides bonds for qualified small contractors and subcontractors, including minority, women and veteran-owned companies and those seeking their first bond. We have access to a number of special programs for emerging contractors, including the U.S. Small Business Administration’s Surety Bond Guarantee Program for contracts up to $5 million.

If your subcontractors are currently having a difficult time obtaining bonds, please have them Contact Us TODAY! Our customers achieve amazing results and we want to share ideas with both you and your subcontractors that we think you’ll find immediately helpful. Our advice is free.

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SBA Surety Bond Guarantee Program Increases

President Obama’s Economic Stimulus Plan is bringing billions of dollars to government agencies for spending, along with surety bonding assistance to enhance contractor’s bidding capacity. In addition, the limit on the US Small Business Administration’s (SBA) surety bond guarantee has increased from $2 million to $5 million under the Economic Stimulus Plan, and can be increased to as much as $10 million for certain federal contracts.

Airport, highway, road and transit projects funded by the stimulus plan represent an important opportunity for construction firms all over the country to create jobs and literally build a stronger economy. Contractors who have surety bonding will be in a better position to benefit from the stimulus spending.

If you’re having difficulty getting the surety bonds you need to support your projects, if future growth depends on expanding your bonding capacity, or if you simply need better service and turn around, you should know that Surety Bond Associates specializes in helping contractors like you. We also have access to a number of special programs for emerging contractors, including the SBA Surety Bond Guarantee Program.

It’s easy to get started. Simply Apply Online, or Contact Us TODAY!

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