Masonry Magazine October 1992 Page. 32
The contractor's presentation for the surety should include an aging of accounts receivable and accounts payable; information from the contractor's bank; fiscal year-end financials for at least five years, with closed and open work scheduled tied in for the last two years; personal financial statements of company officers and owners; reference letters; a copy of the contractor's buy-sell/continuity agreement; and general information on the company.
The surety will want to know a great deal about the contractor's banking relationship, Peterson said, including information on its credit line, the basis (secured or unsecured), usage and current outstanding indebtedness, and average checking account balances. Sureties don't like to see contractors pledge their accounts receivable to the bank. They do like contractors to have at least some unsecured credit at the bank, he said. How much surety credit should a contractor be able to obtain? The answer varies, of course, but the contractor's entire work program, including bonded and unbonded jobs, may be ten or more times net worth with working capital of roughly 10%. It's possible for a general contractor to get twelve to fifteen times net worth, although ten times net worth is more likely for a subcontractor. It may also be possible to get fifteen times working capital, Peterson said. Contractors should work to develop a relationship with a surety. "The credit side of the construction business is more manageable than the contractor thinks," said Peterson, who is vice president of The Rockwood Company of Chicago.
SHEILA WERTZ is a Chicago area writer and editor. She has edited Interior Construction Magazine for the Ceilings and Interior Systems Construction Association for the past thirteen years. Previously, she edited a newsletter for the Sealant Waterproofers and Restoration Institute. A member of the Construction Writers Association, she also has written for a variety of associations and publications in the construction industry.
CHANGES & GROWTH
Racine Technologies has reacquired ownership of Techsonix, a company they founded in 1983. Racine holds over a dozen copyrights, a trademark and a rarely granted conceptual patent on digitized construction takeoffs and estimating systems.
Stucco Stone Products has announced that their new name is now Stone Products Corporation.
Walker-Jones Equipment, Jackson, Mississippi, has been appointed a dealer for JCB construction equipment. The main office in Jackson will offer sales, rental, parts and service while branch offices in Gulfport, Hattiesburg and Columbus will offer sales and demonstrations only.
RGC Construction Equipment, manufacturer of hydraulic tools and equipment for the construction industry, has announced addition of several new members to its representative network. Troy Epperly and Ed Hathcock of the Shultis Sales Agency, will cover Arizona, Colorado, New Mexico, Utah and Wyoming: James York will cover northern California and Nevada; Jim Russell of Jim Russell and Associates, will cover northern Illinois and Chicago; Joe Bell of Joe Bell and Associates, will cover eastern Tennessee and Kentucky: Jerry Hryclw of M.J. Hyrclw, Limited, will cover Ontario and Quebec, Canada; George Bell of Bell Industrial will cover Alberta and British Columbia; Enrique Barroso of Barosso Associates will cover Puerto Rico.
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32 MASONRY-SEPTEMBER/OCTOBER, 1992