The Qualifying an Additional Business Entity application has been streamlined and we are finding that it has helped a lot of individuals be able to realize their goals. The CILB no longer requires CPA prepared financials or letter of capitalization which means that they are not checking for positive equity any longer if it does not go to the board for review. They also do not require 3-months of bank statements, bank verification letter, a list of projects completed by each company, information about vendors or who can pull permits, or a signature from a “responsible party” of each company.
What they do still require is that you own at least 50% of each business independent of each other to have the application processed and approved at the DBPR. Officially they have 30 days to do this review, but typically things are getting completed in 2 weeks or so. If the qualifier does not own at least 50% of each of the business entities, then the application will have a mandated review by the CILB. This review will bump the approval process from the 2 weeks to about 3 months. This is all because of scheduling for the board meeting. The qualifier would need to attend the meeting and answer any and all questions posed by the board.
Things to keep in mind:
- The qualifier must either be an equity owner of BOTH companies OR a W2 employee of BOTH companies, or a combination thereof. If they are not, there is a VERY slim chance that they will approve the application, and it is not recommended to proceed.
- Ideally, the two business entities should be geographically convenient to each other, as the qualifier will need to be able to explain how they will be able to properly supervise the projects being undertaken by both companies.
- The board can ask any other questions that they deem relevant to this process.
In addition to this, they are still looking for open bankruptcies/liens/judgments, but now 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.
We know this is a lot to take in… trust us… WE KNOW. No one likes change, but this could be just the change you have been looking for. The one thing that can be counted on, we are here to help you.