As anyone who has been connected with us for any length of time will know, we are always saying that things could change at any time. Well they did, but thankfully the state has given us time to adjust by allowing us to continue the old way for a while as we (and they!) learn their new system. What are we talking about? New applications. The state has updated their forms and we have scoured them to be able to let you know how they are easier than the old ones and more importantly how they are more difficult.
Let’s start with the easy. For Initial Issuance applications, the state no longer requires someone else to verify (sign off) on experience. Also, none of the new applications require bank letters or financial statements. The form that was streamlined the most, though, is the Qualifying an Additional Business Entity application. They no longer require CPA prepared financials or letter of capitalization, 3-months bank statements, bank verification letter, a list of projects completed by each company, information about who can pull permits or vendors, or a signature from a “responsible party” of each company.
This is sounding pretty good, maybe too good, right? Well, now let’s discuss why they are harder. Old applications only looked at credit reports for open bankruptcies/liens/judgments, but the new applications also look at credit SCORES. Any applicant with a credit score below 660 is required to get a financial stability bond. For Division-1 licenses (CRC, CBC and CGC), the bond is $20,000. For Division-2 licenses (everything else), the bond is $10,000. Bond amounts can be cut in half ($10,000 D-1, $5,000 D-2) by taking a 14-hour financial responsibility course, but we are finding that surety companies are only offering these bonds on a very limited basis. From what we’re hearing right now the bond cost is around 3-5% of the bond amount PLUS collateral equal to the bond amount!
Although experience requirements have not changed, the way that experience is provided on the application has become much more detailed. Now (for D-1 apps) every month of experience required needs to be accounted for on the paperwork with specific projects. Also, the main ‘buzz words’ of each license type are listed as check-box items. Each project must list the specific time period when the work was performed, and the check-boxes that apply to the project must be selected. The combination of check boxes & months must be calculated to come up with the appropriate amount of experience. D-2 is a bit more lenient than D-1, but the details are still much more elaborate than on the old forms. In addition to all of that, the name, license number, email address and phone number of the contractor that supervised the experience must be listed for each project. This is to make sure that only experience gained while under the employ of a licensed contractor is used on the application.
We know this is a lot to take in… trust us… WE KNOW. We have until July 13th to submit the old forms, which gives us some time to learn the new ins and outs, so to speak. No one likes change, but as always, if you have any questions just give us a call. The one thing that can be counted on, we are here to help you.