Concrete is how we built the world, today, maybe you drove on it, maybe walked on it, and I would 100% guess you’re sitting on it right now, it’s how we make roads, buildings, bridges, parking lots, basically everything we see around us, but the thing with concrete is we never really seem to notice it, it’s just there, and because we never really notice it, we also never think about the companies behind all of it: the concrete companies, businesses that get hired to handle the concrete part of a house, a warehouse, a road, a school, or a much bigger construction project.
Concrete companies are basically like every other company on earth. They want to grow, because (duh), that's the whole point of being in business. We want to grow and make more money. So how do they grow?
Well, first, they start by doing concrete for a small house, then do it for a slightly bigger building, then maybe a school, until they start getting into those bigger jobs, stuff like big roads, skyscrapers, big government projects, big public schools, and around that time, this is where a big problem comes up.
Let's say our concrete company has grown all the way up and now wants to do the concrete for a skyscraper. The people behind that project can't just hand a job that size to one company and hope everything goes fine, the concrete company could run out of money, lose half their crew, go out of business, whatever, and now these people are gonna be stuck with half a building.
So they make a rule. Before you can take this job, you have to bring somebody big standing behind you, somebody who'll fix your shit it if you can't finish.
And that somebody is a small group of financial companies, they're the club.
The club looks at your books, your history, the size of the jobs you've done before, and they either agree to stand behind you or they don't. So think about it like you're 22 and trying to rent an apartment. The landlord is gonna be like: “hey, you need a co-signer, you have to bring somebody older, maybe your dad or your uncle, to sign with you.”
And if you do bring your or your uncle, they get to decide how much risk they’re willing to take on, they might happily back you on a little apartment for $1,200 a month, but then if you come back asking: I need to co-sign a $6,000 penthouse when you’re 22, barely have any credit, and your paycheck probably can’t cover it, your dad or uncle will be looking at you like, dude, if you fuck this up, I’m the one paying for it, so no.
Now drop that same uncle situation back on the concrete company.
Remember, your uncle doesn't give you cash when he agrees to co-sign. He just tells the landlord "I'll cover him/her if he/she can't pay." The club does the same thing, just at a bigger scale.
They look at the company's books, their history, the size of jobs they've done before, and they land on a number, (let's say $2 million), they don’t give them $2 million dollars obviously that’s the total amount of risk they're willing to vouch for, across every job the company might take on.
For example: the concrete company wants to take a job worth $1 million. They go to the club and say "back me on this one." The club looks at their $2 million limit, sees this $1 million job would use up half of it, and either says yes or no, same as your uncle deciding whether he's cool signing for a $1,200 apartment.
Throughout my research, I found out that the concrete company doesn't just walk up to the club themselves. They can't. These are big financial companies and they're not taking a cold call from some guy in a truck. There's a middleman. He's the one who takes the company's books, walks them in, argues their case, and comes back with the number.
It's called a bond agent:
A bond agent is basically the person who goes between the concrete company and the club. The concrete company says hey, I need a bond for this job (a bond is just the signed paper itself, your uncle's name on the lease, except it's for one specific job), and the bond agent takes their books, their history, the jobs they've done before, brings all of that to these financial companies, and tries to get them to say yes.