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Tennessee Contractors License Application Process

Contractor Tips , Posted by Charlotte Smith on

Tennessee Contractors License Application Process

Did you know that the state of Tennessee requires all prime contractors and most subcontractors to hold a license before they can bid on projects that exceed $25,000?

If you're interested in becoming a construction professional, it's important to secure your Tennessee contractors license first. Whether you want to work on new builds, repairs, or renovations, it can open new doors and lead to a long, successful career. 

Not sure where to begin? The process can be complicated, but we're here to help. When you're ready to get started, schedule a Contractor Licensing Start-Up Consultation to speak with one of our licensing agents!

Today, we're sharing a step-by-step guide to becoming a contractor in Tennessee. You'll also learn how our courses, classes, and exam prep resources can get you there quicker!

Why Do I Need a Tennessee Contractors License?

If you're ready to begin work in construction, you may wonder why you need to take the time to get licensed in the first place.

Put simply, you'll need your license if you plan to work on any type of significant project in this industry. This includes at-home, DIY projects over $3,000 as well as larger projects over $25,000.

There are a few different tiers of licenses in Tennessee to find out about. The specific one you need depends on the kind of work you want to do. 

Let's take a closer look.

Home Improvement License (Residential)

Tennessee requires a home improvement license for any project above $3,000 and under $25,000. These projects can range from small home renovations to large-scale commercial builds.

Even if you plan to perform the work yourself and you're not a construction expert, you'll still need to obtain this license if you want to go the DIY route. If you don't want to tackle it, you can hire a professional who's already licensed.

In this state, all projects that cost within this range are considered home improvements. This is a broad category that encompasses everything from cabinet refinishing to new deck builds and everything in between. 

If you're the handy type who likes to make upgrades and repairs around the house, it's smart to get your home improvement license. This can save you time, money, and a headache down the road. Working without a license can lead to a range of consequences, including hefty fees. 

If you're a construction professional looking for more work in the residential space, a license is also critical. With yours in place, you can stand above the competition, maintain compliance with local contractor laws, and expand your ability to take on new, profit-driving work in your region. 

General (Prime) Contractor License

Often, construction teams will need to work on projects that exceed $25,000. If this is the case, the project will no longer be considered a home improvement and you'll need to have your general (prime) contractor license. 

Once you do, you're free to bid on large, long-term commercial, residential, or industrial construction projects in any price range above $25,000. This could include whole-house renovations, stick builds, major repairs, or any other significant effort. The Tennessee real estate market is hot and competition is fierce, so having your license is a smart way to distinguish your team.

Anyone bidding, offering to engage, or negotiating on a project over $25,000 must hold this license. This includes:

  • Prime contractors
  • Subcontractors for the following specialties:
    • Electrical, Mechanical, Plumbing, HVAC, and Roofing
    • Masonry (if $100,000 or higher)

Construction Manager License

If the project exceeds $25,000, a licensed construction manager must also be on site. This is a separate license that many industry professionals choose to get in addition to their general or prime contractor license. 

If you're thinking about entering management work or setting up your own construction business, it's worth getting licensed in the area of work you plan to oversee.

Step 1: Take the Exams

If you're interested in becoming a contractor, you'll first need to take two primary exams. These include:

  • Business and Law Exam
  • Trade-Specific Exam (e.g. Plumbing, Mechanical)

There are testing centers located throughout the state, so you should be able to schedule a time that works for you. It's smart to prepare as much as possible ahead of time, so you're familiar with the topics and you know what to expect. 

That's where we come in! 

At the Contractor Training Center, you'll find a host of exam prep services designed to maximize your understanding and help you pass your licensing exam on your first try! In addition to our self-paced, pre-recorded online courses, we also offer exam-prep books to help you learn the material on your own time. 

We've helped more than 30,000 contractors get their licenses, and we'd love to add you to that list. Instead of struggling with the material on your own, access our digital resources to simplify the process and fast-track your study sessions.

You can learn more about the courses and classes we offer on our Tennessee Site

Step 2: Complete the Financial Statement

As mentioned, the type of Tennessee licensing classification you need will depend on the price points of the projects you pursue.

That's why the state requires you to complete a formal financial statement as part of your application. In this statement, you'll thoroughly discuss the type of building projects you plan to work on once you obtain your license, along with their associated monetary limits.

An accredited CPA will audit and review the statement for accuracy, reaching out to you for clarification if required. 

Step 3: Get Letters of Reference

Before granting you a contractor license, the state board will want to ensure that your business is reputable and professional. 

To do so, they'll need a letter of reference from one of your past clients or employers. This should be someone who can speak confidently about the quality of your work and services. 

Step 4: Get Proof of Insurance

Any construction project requires some degree of risk. This is why the board also requires you to submit proof that you carry current, up-to-date business insurance.

If you employ a team of construction workers, you should also provide a copy of your worker's compensation insurance. Note that the insurance policies you provide should align with the monetary limits you outlined in your financial statement. 

Step 5: Get Proof of Business Registration

Before you can submit your application, you'll also need proof that your business is registered as a legitimate corporation or LLC in the state of Tennessee. 

If you have not completed the registration process yet, you'll need to take care of that first. You can visit the Secretary of State's office or website to learn more. 

Step 6: Complete the Application 

Once you've taken care of the steps above, you can begin the process of applying for your two-year contractor's license in Tennessee. 

The first is to complete the required application. You can find the list of online forms here

When you do, you'll be required to specify which type of contractor license you're applying for. The options include:

  • Residential Contractor
  • Prime Contractor
  • Specialty Subcontractor
  • Construction Manager

In addition, you can also select the types of buildings that you plan to work on. Those choices include:

  • Building (BC Combined)
  • Residential (BC-A)
  • Industrial (BC-C)
  • Commercial (BC-B)
  • Small Commercial (BC-b/sm)

As you can see, there are lots of niches to consider. Before you start completing the application, take the time to think about the type of work you want to do, and where you want to do it. 

Once you complete the application, sign it and get it notarized before you submit it. Make sure all of the information is correct before you turn it in. Even the smallest error can cause a delay in the processing, which could throw your future construction projects off-track. 

Step 7: Pay the Fees

The first year you apply for your contractor license, the non-refundable fee is $250. Every time you need to renew your license, the fee is $200.

You can pay this fee in a personal check or money order. Simply attach it to your completed application and submit everything together, so it all stays in the same place.

Once you complete the application and are ready to send it in, you'll mail it to the Tennessee Board for Licensing Contractors

Note that in addition to the licensing fee, you'll also be required to pay a separate fee to take the required exams. Each exam fee is $55, for a total of $110 combined.

Learn More About the Tennessee Contractors License

Now that you know how the application process works, are you ready to apply for your Tennessee Contractors License? The process isn't overly complicated, but there are multiple steps involved. 

As you prepare for your exams, we'd love to help you build your confidence, skills, and knowledge. In addition to exam prep, we can also walk you through the application process as well as provide resources and support as you build your career.

When you're ready to get started, schedule a Contractor Licensing Start-Up Consultation to speak with one of our licensing agents!

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