Contractor licensing is one of the most important initial steps in having a legitimate construction business. Holding the proper license helps protect your payment rights, but it also lets your customers know that you're a professional with a certain level of expertise. Most states require contractors to hold a license by law. Working without a contractor's license is illegal in some cases, and it can cause you to lose your rights under mechanics’ lien laws. But which license do you need? What are the general contractors' license requirements you need to meet? This guide provides answers to your questions about state requirements to get a contractor's license.
1. Determine the Type of License You Need
Each state has its own unique requirements to get a contractor license, and they will vary depending on your exact location or the license type you need. Some of the most common contractor license types are:
- General contractor license
- Subcontractor license
- Electrical contractor license
- Plumbing contractor license
You will have two options when it comes to determining the exact contractor license you need. First, you can contact your state's contractor license board or conduct your own research to determine the licensing requirements you must meet. Alternatively, you can contact Contractor Training Center, where a licensing specialist will work with you on your specific state requirements and how to get started.
2. Get a Contractor License Bond
Your contractor license bond has the most extensive range of costs compared to other items, such as your license and application fees. Nearly all states require that construction contractors hold a minimum surety bond before they get their license. A surety bond is not insurance but instead ensures you will follow state regulations in construction with each project you complete.
A contractor license bond protects your clients from financial loss should work not be performed according to standards or building regulations. But a contractor bond comes at a cost. It’s typically charged as a percentage of the total bond needed, and it is required to be in place before submitting your contractor license application.
3. Complete an Application
Even though the exact procedure varies by state, it usually begins with completing an application. When the state approves the required forms, a notice will be sent announcing the appointment to take the state assessment. The exam will cover areas such as law and business based on state codes and construction based on the Uniform Building Code. Once an applicant successfully passes the exam, they must:
- Spend the money on compulsory license fees
- Post a bond
- Secure workman's compensation
- Get liability insurance if needed
- Prove minimal working capital
Each license is issued for a set timeframe and must be continuously renewed for you to continue operating as a licensed contractor.
Is getting a contractor's license worth the time and effort? The short answer is yes! If you're considering getting a contractor's license, it's good for you. It pays to get an official stamp of approval from the state. Once you complete the requirements to get a contractor's license, you'll have a document that can make you feel proud. A license can also open you up to bigger, higher-paying jobs and a growing customer base. In other words, your new contractor's license can pay for itself by bringing you more business and bigger jobs. Start by reviewing the process in your state and its requirements.
At Contractor Training Center, we are here to help you get your contractor's license. Our licensing specialists can help you navigate the requirements to get a contractor's license and answer any questions you may have. Contact us today and sign up for a start-up consultation with one of our dedicated licensing specialists.