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A. The underwriting process assesses the contractor’s capability and capacity to perform the contract, as well as the contractor’s character. The purpose of underwriting is to determine whether there is a reasonable expectation that the contractor can successfully complete the contract.
Among other areas addressed during the underwriting process with a Surety Company or Agent are the following:
(1) personal financial status of the business owners/IRS tax forms, etc.
(2) company financial status / balance sheet and income statement. [CPA prepared statements may be required, depending on the quality of statements prepared in-house, and the size of the prospective contract.]
(3) bank & credit information
(4) a schedule of contracts on hand and the stage of completion
(5) resumes of key business owners
(6) a business plan
The Surety Company or Agent may decline to issue a bond without an SBA guarantee. If, however, the Surety Company applies to SBA for the bond guarantee, completion of the following forms is necessary:
(1) SBA Form 994, Application for Surety Bond Guarantee Assistance
(2) SBA Form 994R, Application – Rider, American Recovery and Reinvestment Act
(3) SBA Form 912, Statement of Personal History
(4) SBA Form 994F, Schedule of Work In Process