bidding and bonding

[Mackman]

So i was on pennbid. Which is a website where you can bid on jobs. I was looking at one job which is hauling 1,000,000 gallons of sludge. Im not looking to bid on it. Dont have the trucks to do it. But are any of you guys bonded?? How hard is it to get bonded and what does it all mean. Thanks

[GMAN]

There are a couple of ways in which to have a bond. The most common is to find an insurance company who writes them. It will require you to pay 10% of the bond each year. A $10,000 bond will require you to pay the insurance company $1,000. I checked on one of these only a few months ago and was told that I would need to put up the equivalent of $10,000 in property or other assets in order to secure the bond. There is another way to secure a bond that I was told about a few years ago. I don't rememeber all the particulars, but as I recall, you would need to get a line of credit from your bank and they would send a letter to the one requiring the bond. You may still be required to put up the amount of the bond in assets, but the bank would charge about $300-400 instead of $1,000 to secure the bond per year. In both cases, these are performance bonds. If you fail to fulfill your contract then the bond would be filed on and the one who provided the bond would pay the filer up to the amount of the bond. The insurance company or bank who wrote the bond would then come back on the one who was bonded (you) and then would collect the amount that was paid out in your behalf.