subdivision bonds

PPP: What You Need to Know – Right Now.

Here is strategic information you need right now.

Receiving that PPP loan was great! But now you face significant accounting questions if your fiscal year-end is 12/31. You need to determine the proper way to account for this transaction on your company financial statement. This has big implications for your relationship with your bonding company (Subdivision, Bid and Performance Bonds,) and your bank credit line.

You may have applied for loan forgiveness, and you may have received it from the bank and SBA. Let’s find your exact situation, and how to proceed. Which of the following is your case? In this discussion, we are assuming the company fiscal year-end (FYE) is 12/31.

  1. Forgiveness application has been submitted and approved by the bank and SBA prior to the 12/31 FYE. The loan is wiped off the balance sheet and the funds are recorded as *INCOME. Hooray! There is no remaining debt.
  2. Application submitted, and it looks OK, but forgiveness has not yet been approved. From an accounting standpoint, this is somewhat vague.
    • Treat it as Debt. This may be the safest, most conservative accounting approach. It was, and still is, a Debt on the balance sheet. It’s not income.
    • Record it as a Gain Contingency. This is similar to the Debt approach but instead, the loan is classified as a “deferred income” liability on the balance sheet. When the loan is forgiven, it comes off the balance sheet and becomes income.
    • Record it as a Government Grant. For this treatment, there must be a high likelihood of forgiveness by the bank and SBA. Under this treatment the debt disappears and is recorded as “other income.” This is a much more aggressive approach.

*Reminder: “Forgiven” PPP loan proceeds are not taxable income!

Sound complicated? It is. You need the advice of your accounting professional to handle this properly. Its worth it to have a good one.

Same thing with your bonding company. A good one is capable, responsive and stable. For over 40 years, FIA Surety has been a dependable provider of Site, Subdivision, Bid and Performance bonds. Try us! We want to write the business.

First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950Office: 973-541-3417
Visit us: www.fiagroup.com
Cell: 856-304-7348 We are currently licensed in: NJ, PA, DE, MD, VA, NC, SC, WV, TN,  FL, GA, AL, OK, TX

“Here is the outcome of the Presidential Election!”

Boy, you just can’t wait to hear those words! We’re all sick of the political ads.

So here’s a refreshing change of pace: We just completed a radio show for the Atlanta Real Estate Forum: Why Home Builders LOVE Subdivision Bonds. Click to listen.

FIA Surety / First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417
Visit us: www.fiagroup.com
We are currently licensed in: NJ, PA, DE, MD, VA, NC, SC, WV, TN,  FL, GA, AL, OK, TX

172. Eureka! Agent Finds Gold Nugget!

It was right there all the time, and he didn’t know it!

These “gold nuggets” are missed commission opportunities within your current client base, and they’re NOT hard to find.

Some of your client’s activities must be guaranteed with a 1. Cash Bond, 2. Irrevocable Letter of Credit (ILOC) or 3. Surety Bond. Experts agree* that a surety bond is best. You can find these transactions that are not bonded, and offer to replace the existing security with a Site or Subdivision Bond. Here’s how:

  1. Search your clients for those who have added GL codes 91581, 91583 or 91585. These codes mean your client has added Subcontracting Exposures in connection with property development.
  2. Such projects may require a guarantee to the township for Public Improvements (work such as curbs, sidewalks, etc. your client is required to perform at their own expense.)
  3. If they used a Cash Bond or ILOC, they may unnecessarily tie up their cash – possibly for years! A Surety Bond can be filed to release the cash immediately, and YOU win a “Gold Nugget!

Start panning, and call when we can help. When it comes to Site and Subdivision bonds, We’re Golden! Try us!

Steve Golia
FIA Surety / First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417
Visit us: www.fiagroup.com
Cell: 856-304-7348 
Currently licensed in: NJ, PA, DE, MD, VA, NC, SC, WV, TN,  FL, GA, AL, OK, TX

*International Risk Management Institute – About Site and Subdivision Bonds