Can I get a bid bond with bad personal credit, or is that the end of public work for me?

Your personal credit history can impact your ability to secure a bid bond, but it is not necessarily a permanent barrier to federal public works. Surety companies consider both the business's financial health and the personal financial strength of the business owners, especially for smaller businesses where the lines between personal and business finances are often blurred. For construction contracts, the Miller Act requires performance and payment bonds for any construction contract exceeding a specified threshold.

Offering collateral, such as cash or property, can sometimes mitigate the risk for a surety, making them more willing to issue a bond despite a less-than-perfect credit score. A funds control arrangement, where an independent third party manages project payments, can also provide comfort to a surety by ensuring funds are used appropriately for project expenses. The SBA's Surety Bond Guarantee Program can help small businesses obtain bid, performance, and payment bonds by guaranteeing a percentage of the bond amount to the surety, which reduces the surety's risk. This program is specifically designed to assist small businesses that might have difficulty obtaining bonds through conventional channels.

To find a surety agent experienced with these challenges, you should contact an APEX Accelerator (formerly PTAC) or a Small Business Development Center. They often have lists of surety agents who specialize in working with small businesses and understand the nuances of the SBA's bond guarantee program.