Skip to Main Content
What do you need to know during the COVID-19 outbreak? View Resource Center >


Construction Industry COVID-19:

Financial & Processes Preparedness

By: Drew Addison, Vice President of Surety


There was quite a bit of discussion around the development of a recession due to the effects of governmental policy to combat the virus, as well as comparing the current performance of the market against 2008-2010 recession data.


As we learned in 2008-2010, it is better to be proactive than reactive, especially with the bright red flags that are visible. Reflection on recent economic recessions is a good place to start. You should ask yourself:


Once you get your head and plans on the other side of fear, THEN navigating the fear becomes easy and disciplined.


Align your Financial Support Team – The Time is NOW for Conversations with:


Your Bank – What to Ask…

Begin the conversations now with your banker regarding Line of Credit terms and limits. A full underwriting on your accounts by your bank will be necessary, experience and capitalization will dictate what you qualify for.


A detailed review of options for your Line of Credit terms is critical for every business owner, regardless of economic performance. Ideally, you will want to explore the options of extending the terms to reflect Long Term Debt when you borrow against it. You will also want to discuss your interest rates, and planning to improve them.


Are there Alternative Lending options available?


State Lending Opportunities – SBA Support

These are loans and they will need to be repaid. All loans over $25K require collateral, and longer term loans require real estate as collateral. They are low interest (3.75%) and can have longer repayment terms depending on the collateral and need. They can be used for most purposes, except refinancing other term loans.


If you are projecting financial hardship, this might be a plan to consider. If you have a good relationship with your bank, I urge you to visit with your bank first. In many cases, the banks are preparing payment deferral plans or interest-only plans, to climb out of the hole. That initial conversation may help avoid taking on more debt.


The SBA Disaster Relief Program will be administered directly through the SBA via the following website:


Your Financial Support Team (Banker, Surety, & CPA) – Open Lines of Communication

“To effectively communicate, we must realize that we are all different in the way we perceive the world and use this understanding as a guide to our communication with others.” – Anthony Robbins


Your CPA, Banker, and Surety Agent are key business partners that you have available, and you can benefit greatly by opening direct communication between yourself and your chosen team.


Your Revenue and Profit Centers – Vendors and GC’s/Project Owners

Just as your CPA, Banker, and Surety Agent are your Financial Support Team, your Vendors and GC’s/Project Owners are your Revenue and Profit Team. Again, Communication is KEY in these relationships (E-mail correspondence alone is not enough)


Your Company & YOURSELF – Key Considerations for Internal Processes Management

Tough decisions may need to be made in the very near future. Now is the time to identify areas of consideration so those can be informed and calculated decisions.


Your Company & YOURSELF – Key Considerations for Internal Financial Management

Utilize tools available to manage your company’s financials from a “30,000 foot” level, rather from the “jobsite” level. Analyze and monitor your financial annual trends and performance to identify what works:



Financial Disclaimer

To assure greater accuracy when implementing financial analysis tools and this information, it is important to examine the trend over time (minimum of three years). Keep in mind that no technique is perfect. All analyses are reliant on the quality of the underlying financial statement data. The preference of all sureties is that their contractors obtain CPA prepared statements annually. While a CPA prepared Consolidation will suffice at the start of the program, it is imperative that it be upgraded to a CPA Year End Review at the very least. The quality of the statement is always considered in negotiations to grow your program (i.e. capacity growth, dividend availability, indemnity, etc.). This whitepaper, and our analyses are not prepared by a registered CPA, broker, analyst, investment advisor or financial expert. Everything provided is purely for guidance and informational purposes. All Information contained herein should be independently verified and confirmed. We do not accept any liability for any loss or damage whatsoever caused in reliance upon such information or services.


Drew Addison Vice President of Surety

10101 Reunion Place, Suite 100 – San Antonio, Texas 78216

(210) 697.2226 direct • (361) 254.0896 mobile

Posted by in Blog, Surety

Archives by Month:

Search Blog: