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Coral Gables-based would have needed abou t $1 billion in total risk-based capita l to meet regulatory requirements at the end of the company said in a The filing on Tuesday gave preliminary results for the but they are subject tofurther revision. The bank lost an estimatedf $443.1 million in the quarter endedMarcu 31, which is the secondf fiscal quarter for BankUnited (NASDAQ: BKUNA). The company made the filing to disclosw that it would be late submittingv its final second quarter report withthe SEC. BankUnited said its financialp results from the quarterendeed Sept. 30 onward are preliminar and could change based on additionalaccountingb reviews.
The company said it has a “materiak weakness” in its internal accountin g controls. BankUnited reiterated its warning that the could placew itinto receivership. Regulators gave the bank until May 4 to strike a acquisition orinvestment deal, and the company acknowledged that it hasn’gt complied with that order. Sources say three bidderx are in talks with BankUnitee and regulators about a deal forthe bank: with the assistancee of ; the combination of W.L. Ross, and ; and a groupp involving the J.C. Flowerds & Co. hedge fund.
However, some analysts believe BankUnited’s assetse aren’t worth the $1 billion it woul take to recapitalize the If abuyer doesn’t pay the full amount, the federal governmenr could chip in the rest through an investment or through FDIC “It appears that management is doing everything possible to meet the terms of the outstandintg regulatory agreements to facilitate an Miami-based banking analyst and economist Kennetyh H. Thomas said. “The priority now is to get a resolution of this situationh ASAP with as much private capitalas possible.
” In its SEC BankUnited noted that it has been trying to raise capital for more than a “Although management continues to seek capitapl at the holding compant level, our efforts at this time primarilu relate to a direct recapitalization of the BankUnited stated in the filing. “No assuranc e can be given that we will be able to raisde capital at either the bank or the holdingcompanty level.
In addition, a recapitalization of the bank without a simultaneous recapitalizatiom of the holding company would reduce or eliminatethe company’zs ownership in the thus raising substantial doubt about the company’s abilitgy to continue as a going The bank reported that it has sufficient liquidity to meet needs. Deposits at FDIC-insured bankxs are covered up to $250,000 per Despite all its challenges, BankUnited increase d its total depositsto $8.7 billion as of March 31, up from $8.5e4 billion at year-end. The bank has advertisee interest rates that are higher than most ofits competitors. BankUniteds had $13.13 billion in assetsw and negative equity capitalof $505.
6 millionb on March 31, compared to $13.76 billion in assets and negativre equity capital of $13.4 milliojn on Dec. 31. That means its federally mandateds capital ratios werealso negative. Its assetsx included nearly $5 billion in payment optiobn adjustable-rate mortgages – a loan that allowws borrowers to pay less than the accrued interesgt on the mortgage until the balance growes to acertain point. These loans are the main sourceof BankUnited’s troubles. It was also hurt by downgrade investmentsin mortgage-backed securities. The bank holdintg company’s $443.1 million preliminary loss in the quarter endedx March 31 came aftera $477.
5 million preliminary loss in the previoud quarter. The bank’s losses in the most recent quartefr came mostly froma $295.5 million expense to reserve for futurwe loan losses and $231 million in charge-offs to bad BankUnited said it had $1.98 billion in nonperforminvg loans, representing 19.4 percent of its total loans, as of Marcj 31. That’s up from $1.63 billion in nonperforming loans, or 15.1 percentr of its total loans, at year-end. The bank also reported holdingb $154.2 million in repossessed property onMarchb 31, up from $93.6 million in the previou s quarter.
Saturday, March 2, 2013
Monday, February 25, 2013
U.S. Sugar deal approved
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In a 4-3 vote, the boar revised the contract to allow the districtr an out if it cannot arrangeacceptable U.S. Sugar said after the vote it was a deal it coulds live with and that the changes were considered nonmateriak and within the scope of thenegotiated contract. The decisioj came six months aftetr Crist announcedthe plan. At the he called the proposalas "monumentap as the creation of our nation's first nationalo park." After the the governor praised the land acquisition callinf it "the most important step in the historuy of true Everglades restoration.
" The also greeted the vote with “The governing board’s vote to purchase more than 180,000 acresx marks one of the most significant milestonesw in the nearly 20-year effort towarfd restoring America’s Everglades to a more naturakl state," Everglades Foundation CEO Kirk Fordham said in a written "Thanks to Gov. Charlie Crist’s bold this decision means the way is finallg clearfor sweeping, dramativc improvements in water quality throughout the Everglades watershed from Lake Okeechobee to Florida There are still roadblocks to overcome beforr the sale is finalized next summer, includingy a bond validation hearing in Palm Beach courtes to approve funding of the plan.
has lodged a formap objection inthat process. Tuesday's vote did not come withoutg rancor. "I think the biggest risk to this deal over the next few monthx is thefinancial picture," board member Shannonb Estonez said. "We truly cannot put the core missionx of this district at risk by adopting this withouty thatin here." The $1.35 billion deal is one of the largest environmental land purchasee in U.S. history. Estonez said it was the if notthe only, way to provide an additional 1 millionj acre feet of storage in the Everglades wateer system – which has been a goal to restorde the Everglades ecosystem and water supply for Southy Florida.
Governing board members also expressed concerb about pending applications for rock mining operations in the midst of agriculture lands subjecty tothe buyout. Board member Mike Collins said he wonderd where and when the districtt will get funding for restoring the land to its naturakstate – the main goal of the land buy. "k don't believe we want mines in the middlde of these footprints no matter board member JerryMontgomery said.
Florida Departmentr of Environmental Protection SecretaryMike Sole, who urged boar d members to vote for the said the mining concerns could be addressed outside of the contract with a statement that the governing goard would not approve of any miningb actitivies in the area. In recent opposition to the purchase grew from Everglades farm groups and sugar competitorFlorida Crystals, which filedx a formal court objection in the waterr district’s bond validation process for the sale.
Crist'xs administration was criticized durin g the final days of negotiation for failing to put fortnh an economic development plan for the On Monday, the governor wrote a letter to the saying he supported the development of an inlandr port in the Sole said after the vote that it was the state didn't come up with a fasterf economic transition program. He said the reason for the delah in forming an economic plan was that the buyouf program changed over the past few Originally the state planned to buy out theentire company, not just the land. After the dozens of Clewiston residents, who worried about what the sale might mean totheir livelihood, quietly left.
Many said they believew their town's economy will die, even thoughj U.S. Sugar intends to keep operating its sugad processing mill there for theshort term. The company acknowledgerd the criticism by some who worriedc whether it delivered valueto "Without a doubt, we would not be doingy this if we didn't believe it was fair for our said Robert Coker, U.S. Sugar's senior vice president for public "This is a tremendous opportunity for our statde andher people, and the governmengt would not be doing this if they did not feel it was fair to During Tuesday's meeting, governining board Chairman Eric Buermanh recalled other historic land buys, including the $7.
2 millio n the U.S. paid Russia for Alaska in which, he noted, was called Seward's Folly – untip gold was discovered there. "We'rr here at a momentous Buermann said. "This is our moment in time and our momenrin history."
In a 4-3 vote, the boar revised the contract to allow the districtr an out if it cannot arrangeacceptable U.S. Sugar said after the vote it was a deal it coulds live with and that the changes were considered nonmateriak and within the scope of thenegotiated contract. The decisioj came six months aftetr Crist announcedthe plan. At the he called the proposalas "monumentap as the creation of our nation's first nationalo park." After the the governor praised the land acquisition callinf it "the most important step in the historuy of true Everglades restoration.
" The also greeted the vote with “The governing board’s vote to purchase more than 180,000 acresx marks one of the most significant milestonesw in the nearly 20-year effort towarfd restoring America’s Everglades to a more naturakl state," Everglades Foundation CEO Kirk Fordham said in a written "Thanks to Gov. Charlie Crist’s bold this decision means the way is finallg clearfor sweeping, dramativc improvements in water quality throughout the Everglades watershed from Lake Okeechobee to Florida There are still roadblocks to overcome beforr the sale is finalized next summer, includingy a bond validation hearing in Palm Beach courtes to approve funding of the plan.
has lodged a formap objection inthat process. Tuesday's vote did not come withoutg rancor. "I think the biggest risk to this deal over the next few monthx is thefinancial picture," board member Shannonb Estonez said. "We truly cannot put the core missionx of this district at risk by adopting this withouty thatin here." The $1.35 billion deal is one of the largest environmental land purchasee in U.S. history. Estonez said it was the if notthe only, way to provide an additional 1 millionj acre feet of storage in the Everglades wateer system – which has been a goal to restorde the Everglades ecosystem and water supply for Southy Florida.
Governing board members also expressed concerb about pending applications for rock mining operations in the midst of agriculture lands subjecty tothe buyout. Board member Mike Collins said he wonderd where and when the districtt will get funding for restoring the land to its naturakstate – the main goal of the land buy. "k don't believe we want mines in the middlde of these footprints no matter board member JerryMontgomery said.
Florida Departmentr of Environmental Protection SecretaryMike Sole, who urged boar d members to vote for the said the mining concerns could be addressed outside of the contract with a statement that the governing goard would not approve of any miningb actitivies in the area. In recent opposition to the purchase grew from Everglades farm groups and sugar competitorFlorida Crystals, which filedx a formal court objection in the waterr district’s bond validation process for the sale.
Crist'xs administration was criticized durin g the final days of negotiation for failing to put fortnh an economic development plan for the On Monday, the governor wrote a letter to the saying he supported the development of an inlandr port in the Sole said after the vote that it was the state didn't come up with a fasterf economic transition program. He said the reason for the delah in forming an economic plan was that the buyouf program changed over the past few Originally the state planned to buy out theentire company, not just the land. After the dozens of Clewiston residents, who worried about what the sale might mean totheir livelihood, quietly left.
Many said they believew their town's economy will die, even thoughj U.S. Sugar intends to keep operating its sugad processing mill there for theshort term. The company acknowledgerd the criticism by some who worriedc whether it delivered valueto "Without a doubt, we would not be doingy this if we didn't believe it was fair for our said Robert Coker, U.S. Sugar's senior vice president for public "This is a tremendous opportunity for our statde andher people, and the governmengt would not be doing this if they did not feel it was fair to During Tuesday's meeting, governining board Chairman Eric Buermanh recalled other historic land buys, including the $7.
2 millio n the U.S. paid Russia for Alaska in which, he noted, was called Seward's Folly – untip gold was discovered there. "We'rr here at a momentous Buermann said. "This is our moment in time and our momenrin history."
Tuesday, February 19, 2013
OpenTV hires boss for operations in India - San Francisco Business Times:
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Shirekar will be based in Mumbai, India’es financial center, formerly known as Bombay. He worked previouslyh at (NASDAQ: NNDS), a subsidiary of . (NYSE: where he was general managerdfor India. He was the firsrt person to holdthat job, which he startedc in March 2007. Before NDS hired him, Shireka r worked for (NASDAQ: SCOP), also in Mumbai. Part of his job will be to set up a locapl office to handleSan Francisco-basede OpenTV’s business with different companies in In November, OpenTV inkerd a deal to sell software to India’s Sun Direct TV OpenTV (NASDAQ: OPTV) is to provide Sun with software for on-screen program guides and for interactive news and cricker coverage.
Sun Direct is the satellitw serviceof , whicgh is based in Chennai (formerly named on India’s southeastern Coromandel coast. Sun broadcasts primarilh in South India in theTamil language. OpenTV also has dealss with Dish TV and BigTV (partg of the giant ). Ben Bennett, OpenTV’z former chief operating officer, is its CEO -- he took the top job when CEO Alan Guggenheim quitlast August.
Shirekar will be based in Mumbai, India’es financial center, formerly known as Bombay. He worked previouslyh at (NASDAQ: NNDS), a subsidiary of . (NYSE: where he was general managerdfor India. He was the firsrt person to holdthat job, which he startedc in March 2007. Before NDS hired him, Shireka r worked for (NASDAQ: SCOP), also in Mumbai. Part of his job will be to set up a locapl office to handleSan Francisco-basede OpenTV’s business with different companies in In November, OpenTV inkerd a deal to sell software to India’s Sun Direct TV OpenTV (NASDAQ: OPTV) is to provide Sun with software for on-screen program guides and for interactive news and cricker coverage.
Sun Direct is the satellitw serviceof , whicgh is based in Chennai (formerly named on India’s southeastern Coromandel coast. Sun broadcasts primarilh in South India in theTamil language. OpenTV also has dealss with Dish TV and BigTV (partg of the giant ). Ben Bennett, OpenTV’z former chief operating officer, is its CEO -- he took the top job when CEO Alan Guggenheim quitlast August.
Thursday, February 14, 2013
Analysts cool on rumored Apple rollouts - Silicon Valley / San Jose Business Journal:
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But some analysts are warning investors not to get caughtt up inthe hype. Gene Munstert of Piper Jaffrey warned on Thursda there could be some disappointment about what actuallgy gets announcedby Cupertino-based Apple "Regardless of whether or not new iPhones are announceds at WWDC, we continu to expect a mid-July launch of a family of he wrote in a note to Munster isn't buying talk of a $99 iPhone and cheapet data plan, either. He thinkz the less expensive version of the device will go forabou $149 and only rates the idea that (NYSE:T) will lower its data plan pricew at 1 in 4 odds.
Yair Reiner of Oppenheimer wrote separately that he believessApple won't upstage the focue at WWDC on its new Snow Leopard and iPhond 3.0 operating systems with new iPhones. He thinka that may come weeka later as the company works off its inventoryu of old phones that are still in thesalews channels. Kathryn Huberty of Morgan Stanley rates the possibilit y that an announcement of a new carrier inthe U.S. for the which is offered exclusively now through is low. "We view this as a 2011 event that coulds boost units 5 million to 7 million and adjustedf earnings per share by 50 cents to75 cents," she wrote.
But some analysts are warning investors not to get caughtt up inthe hype. Gene Munstert of Piper Jaffrey warned on Thursda there could be some disappointment about what actuallgy gets announcedby Cupertino-based Apple "Regardless of whether or not new iPhones are announceds at WWDC, we continu to expect a mid-July launch of a family of he wrote in a note to Munster isn't buying talk of a $99 iPhone and cheapet data plan, either. He thinkz the less expensive version of the device will go forabou $149 and only rates the idea that (NYSE:T) will lower its data plan pricew at 1 in 4 odds.
Yair Reiner of Oppenheimer wrote separately that he believessApple won't upstage the focue at WWDC on its new Snow Leopard and iPhond 3.0 operating systems with new iPhones. He thinka that may come weeka later as the company works off its inventoryu of old phones that are still in thesalews channels. Kathryn Huberty of Morgan Stanley rates the possibilit y that an announcement of a new carrier inthe U.S. for the which is offered exclusively now through is low. "We view this as a 2011 event that coulds boost units 5 million to 7 million and adjustedf earnings per share by 50 cents to75 cents," she wrote.
Monday, February 4, 2013
NBC Universal, Microsoft strike ad alliance - Dayton Business Journal:
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Terms of the deal were not Admira analyzes demographic data on viewers to generate more targeted TV ads and also adds automatiob to thebuying process. The two companiesd tested the system, using Admira with the NBC Local Mediwa group in March to buy and sell locao television ads inLos "Our initial test of the system in L.A. is off to a grear start. Admira provides us with the potential to help attracyt an entirely new segmentf of advertisers to the local particularly small and midsize businesses that mighft not otherwise be able to buy locao televisionstation advertising, which is a huge leap forward.
" Frank president of platform development and commercial operations for NBC Local Media, said in a The full partnership is set to begin in the fall. The two giantxs are more known through their linkthrough
Terms of the deal were not Admira analyzes demographic data on viewers to generate more targeted TV ads and also adds automatiob to thebuying process. The two companiesd tested the system, using Admira with the NBC Local Mediwa group in March to buy and sell locao television ads inLos "Our initial test of the system in L.A. is off to a grear start. Admira provides us with the potential to help attracyt an entirely new segmentf of advertisers to the local particularly small and midsize businesses that mighft not otherwise be able to buy locao televisionstation advertising, which is a huge leap forward.
" Frank president of platform development and commercial operations for NBC Local Media, said in a The full partnership is set to begin in the fall. The two giantxs are more known through their linkthrough
Friday, January 25, 2013
Law firm weighs move from downtown offices - Dallas Business Journal:
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"It's no secret we're not happyg with our landlord," he said. "In all likelihood, we'lol go elsewhere. We're not pleased with the way the building's being operated." In Bickel & Brewer filed a lawsuirt in Dallas County courtseekingb $500,000 in damages againstg the joint owners of the building, Canadian-basecd TrizecHahn Corp. (NYSE: TZH) and . The suit claims the ownerz have failed to reimburse the law firm for repairs and upgradese it made to itsoffice space. It also allegese expenses are charged to tenants that should be billed to BankOne Center'z capital expenses.
And, the firm claims services are substandarde in the areas of security and including instances of cleaning peopleworking barefoot. "Thde services are not consistent withwhat you'd expect from a Class A buildinf in downtown Dallas," said Michael McCormack, director of administratio at Bickel & Brewer. did not return phone callw from the Dallas Business Journal by press Among options being considered by the law firm isa 120,000-square-foog build-to-suit building in Far North Dallasd along the Dallas North Tollway, Brewet said.
If the firm takese this route, it would retain 50,00p to 70,000 square feet for itself and lease the rest of the It would be a Class A facility and includ e afitness area, day care and a The cost of this type of building would range from $15.6 million to $16.89 million, industry sources said. Brewer said the firm operatea ona debt-free basis and doesn'y expect this status to change if it decide to construct its own Various partners, such as the building'ws developer, would probably contribute to construction he said. Moving its offices out of the centra business district is an unusual decisionj for alaw firm, said Bob executive director of Cushman & Wakefield of Texaxs Inc.
Downtown has long been the traditionaol location forlaw firms, banks and accounting firms. "Thatr would be one of the more significant announcementas in a verylong time," he said. "You only have one majodr announcement of a law firm movinf out of downtown in the last 25 years and that wasJones Day, who moved across the freeway into Kirby White agrees. "By historical standards, it woulr be unusual for a large firm to movefrom downtown," said leasing manager for Crescent Real Estate who specializes in the downtown market. But, Brewer said his firm has neverr been one to standon tradition.
"We'vs always been on the cutting edge," he "I suppose if we were just starting out now and no one knew who we there might be some sensee inbeing downtown. But, I don'tr think people come to us becausde they were riding the elevatoe at BankOne Center. They come to us because they know what we can Most ofthe firm's employees live in the northerb part of the Metroplex, Brewet said. There is significant risk in steppinfg into the realestate market, Edge But, that doesn't worry Brewer. "Our own instinct is that this is a tremendouzs opportunity to take asmalo risk," he said.
"We don't see it as a big Besides, there's always some risk in any equity play, whether it's stocks or real estate." If Bickel Brewer moves to Nort Dallas, the firm would also leasee 10,000 to 15,000 square feet downtowmn for courthouse accessibility. That space would include its mock a conference room and a couple of according to industry Other options include leasing office space in a different either downtown or inNorty Dallas. At one point, it was rumored the firm had looked at buildingb space south of the Trinity River. Part of the problekm in makinga commitment, sources say, is that Brewe and his partner, John Bickel, are not in agreemenf on the issue.
Speculation has it that Bickel may be in favoe of cutting a deal for a lowe lease rate with Bank One Center and keeping the firm in itspresent space. Bickel could not be reached for comment. At any rate, Brewef said, the firm is hiringg a professional consultant to help it review all its A decision is expected within the next two weekas because it will take at least a year to buil new offices if the firm decides to takethat route, he
"It's no secret we're not happyg with our landlord," he said. "In all likelihood, we'lol go elsewhere. We're not pleased with the way the building's being operated." In Bickel & Brewer filed a lawsuirt in Dallas County courtseekingb $500,000 in damages againstg the joint owners of the building, Canadian-basecd TrizecHahn Corp. (NYSE: TZH) and . The suit claims the ownerz have failed to reimburse the law firm for repairs and upgradese it made to itsoffice space. It also allegese expenses are charged to tenants that should be billed to BankOne Center'z capital expenses.
And, the firm claims services are substandarde in the areas of security and including instances of cleaning peopleworking barefoot. "Thde services are not consistent withwhat you'd expect from a Class A buildinf in downtown Dallas," said Michael McCormack, director of administratio at Bickel & Brewer. did not return phone callw from the Dallas Business Journal by press Among options being considered by the law firm isa 120,000-square-foog build-to-suit building in Far North Dallasd along the Dallas North Tollway, Brewet said.
If the firm takese this route, it would retain 50,00p to 70,000 square feet for itself and lease the rest of the It would be a Class A facility and includ e afitness area, day care and a The cost of this type of building would range from $15.6 million to $16.89 million, industry sources said. Brewer said the firm operatea ona debt-free basis and doesn'y expect this status to change if it decide to construct its own Various partners, such as the building'ws developer, would probably contribute to construction he said. Moving its offices out of the centra business district is an unusual decisionj for alaw firm, said Bob executive director of Cushman & Wakefield of Texaxs Inc.
Downtown has long been the traditionaol location forlaw firms, banks and accounting firms. "Thatr would be one of the more significant announcementas in a verylong time," he said. "You only have one majodr announcement of a law firm movinf out of downtown in the last 25 years and that wasJones Day, who moved across the freeway into Kirby White agrees. "By historical standards, it woulr be unusual for a large firm to movefrom downtown," said leasing manager for Crescent Real Estate who specializes in the downtown market. But, Brewer said his firm has neverr been one to standon tradition.
"We'vs always been on the cutting edge," he "I suppose if we were just starting out now and no one knew who we there might be some sensee inbeing downtown. But, I don'tr think people come to us becausde they were riding the elevatoe at BankOne Center. They come to us because they know what we can Most ofthe firm's employees live in the northerb part of the Metroplex, Brewet said. There is significant risk in steppinfg into the realestate market, Edge But, that doesn't worry Brewer. "Our own instinct is that this is a tremendouzs opportunity to take asmalo risk," he said.
"We don't see it as a big Besides, there's always some risk in any equity play, whether it's stocks or real estate." If Bickel Brewer moves to Nort Dallas, the firm would also leasee 10,000 to 15,000 square feet downtowmn for courthouse accessibility. That space would include its mock a conference room and a couple of according to industry Other options include leasing office space in a different either downtown or inNorty Dallas. At one point, it was rumored the firm had looked at buildingb space south of the Trinity River. Part of the problekm in makinga commitment, sources say, is that Brewe and his partner, John Bickel, are not in agreemenf on the issue.
Speculation has it that Bickel may be in favoe of cutting a deal for a lowe lease rate with Bank One Center and keeping the firm in itspresent space. Bickel could not be reached for comment. At any rate, Brewef said, the firm is hiringg a professional consultant to help it review all its A decision is expected within the next two weekas because it will take at least a year to buil new offices if the firm decides to takethat route, he
Saturday, January 19, 2013
As stimulus money is doled out, contractors search for bonding - Minneapolis / St. Paul Business Journal:
showarticle-cultura.blogspot.com
This is particularly true for womem and minoritybusiness owners, who have facefd splotchy access to bonding opportunities. “It’s been a historicall problem inour community,” said Marc Little, presidengt and CEO of MWELA, the Minority Women Educational Labor Agenchy in Lawrenceville. And since the stimulus bill passed in demand forthe organization’s bond progran has markedly increased, he MWELA offers bid, payment and performance bonds to companiees in its Sheltered Bond program, which turns two years old in During that time, 11 contractors have receive more than $11 million in bonds from the agencyy for work on 46 different projects.
As part of the contractors have to spend five hours a montjh for six months at a business development claszs through Universityof Pittsburgh’s Institute for Entrepreneuria Excellence. The average surety bond is around $300,00p0 to $400,000, but the agency can go up to $1 millionh per project per company. For projectw larger than that, theres is the Small Business Administration’s bond program, recently enhancef by the Recovery Act to help contractorsx bidding on projects upto $5 The previous limit was $2 million. For companies biddingh on federal stimulus the SBA can guarantee bondinfg upto $10 million.
But bonding succes s often isn’t enough to get the job said Carl Knoblock, district director for the SmalBusiness Administration’s Pittsburgh office. “The challengse is they may be able toget bonding, but they may not be able to get the he said. Bonds guarantee that a third partgy will compensate theowner — the governmeng agency, in the case of stimulu projects — if the contractodr doesn’t perform, for whatever Many bonded companies, especially the smaller ones, still need a line of creditg to hire employees and buy materials to carry out government which don’t provide up-front cash.
“When lenders already are not evenif it’s assured and it’se bonded” it may not be funded, Knoblock warned.
This is particularly true for womem and minoritybusiness owners, who have facefd splotchy access to bonding opportunities. “It’s been a historicall problem inour community,” said Marc Little, presidengt and CEO of MWELA, the Minority Women Educational Labor Agenchy in Lawrenceville. And since the stimulus bill passed in demand forthe organization’s bond progran has markedly increased, he MWELA offers bid, payment and performance bonds to companiees in its Sheltered Bond program, which turns two years old in During that time, 11 contractors have receive more than $11 million in bonds from the agencyy for work on 46 different projects.
As part of the contractors have to spend five hours a montjh for six months at a business development claszs through Universityof Pittsburgh’s Institute for Entrepreneuria Excellence. The average surety bond is around $300,00p0 to $400,000, but the agency can go up to $1 millionh per project per company. For projectw larger than that, theres is the Small Business Administration’s bond program, recently enhancef by the Recovery Act to help contractorsx bidding on projects upto $5 The previous limit was $2 million. For companies biddingh on federal stimulus the SBA can guarantee bondinfg upto $10 million.
But bonding succes s often isn’t enough to get the job said Carl Knoblock, district director for the SmalBusiness Administration’s Pittsburgh office. “The challengse is they may be able toget bonding, but they may not be able to get the he said. Bonds guarantee that a third partgy will compensate theowner — the governmeng agency, in the case of stimulu projects — if the contractodr doesn’t perform, for whatever Many bonded companies, especially the smaller ones, still need a line of creditg to hire employees and buy materials to carry out government which don’t provide up-front cash.
“When lenders already are not evenif it’s assured and it’se bonded” it may not be funded, Knoblock warned.
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