Top 10 Reasons to get a Contractors License

Top 10 Reasons to get a Contractors License If you’re like a lot of contractors, you may have been procrastinating getting your contractors license for economic reasons. However, with the economy and construction field starting to take a turn for the better, you won’t want to continue to put off getting your contractors license.  Especially when you understand the great advantages of having a contractor’s license, and how it can open doors of opportunity for you!  Of course being a licensed contractor does not make you a better contractor than you already are, but it does make you legal. The media frequently warns the public to hire only licensed contractors to avoid scams and disreputable individuals. Customers will have more confidence in hiring a licensed contractor; they will have greater peace of mind knowing you are recognized by the State as a skilled professional in the construction field. In that regard, having a valid California Contractor License makes all the difference in the world – in your business and especially in your personal future. Listed below are the top ten reasons to get a California contractor license now.

1. Get Legal – It’s important to be aware that in the state of California it’s illegal for any contractor to bid on a job of $500 or more without a contractor license. If caught and convicted of operating without a contractor license the Contractors State License Board (CSLB) can give you stiff fines, and you could find yourself facing jail time or paying between $3,000 and $15,000 in penalties, or both.

2. Financial Independence – Having a contractors’ license gives you opportunity for financial independence. Be your own boss, and start making more money. You can work for yourself part-time or full-time, start your own business and increase your income. There’s no limit to the opportunities for success!

3. Payment for Work – Being a licensed contractor means guaranteed payment for your work through Mechanics Lien Rights. Contractors, laborers, subcontractors and material suppliers can file a “mechanics lien” on the property of a homeowner if they don’t get paid. The mechanics lien puts a “hold” on the property filed by an unpaid contractor, laborer, subcontractor, or material supplier and is recorded with the county recorder’s office. If unpaid, it allows a foreclosure action, forcing the sale of the property in lieu of compensation.

4. Business Loans – Getting a contractor’s license also strengthens your qualifications for small or large business loans. Business loans can give you more financial flexibility enabling you to take on larger construction projects, and increase business growth.

5. Discounts – You can get your raw materials and supplies such as lumber, plumbing, electrical wiring, and other such work materials at wholesale and discount prices.

6. Tax Breaks – Another consideration for getting your contractor license now instead of waiting for more time to pass by, is the tax incentives. You can write-off your trucks, home office, tools, gas, and other expenses when tax time comes around.

7. Protection – The Contractors State License Board (CSLB) routinely initiate sting operations to catch unlicensed contractors. Those caught receive citations with expensive fees and penalties that may include jail time. With a contractor license in hand, you can stop looking over your shoulder… you are free to bid on the jobs you want.

8. Job Security – Being a licensed contractor and working legally allows you to be more competitive in today’s business market. You are no longer limited to taking smaller jobs (under $500 without a license) and you will never need to worry about losing another job to a licensed contractor, because you are not licensed. You’ll also avoid the risks and penalties that come from not having a contractor’s license. In this sense, you have more job security than ever before as your pursue your career in the construction field.

9. Business Relationships – Having your contractor license gives you the freedom to bid on bigger and more profitable jobs for various types of commercial, residential, and government projects. Larger construction companies hire licensed contractors regularly for help with completing numerous projects in a timely manner. Networking with other contractors will help you to develop potential lucrative business relationships. Building relationships will help your reputation as a professional contractor to grow and boost your credibility with future clients.

10. Professional Credibility – Being a licensed contractor tells your customers and business associates, that you are a true professional – skilled, knowledgeable, responsible, and credible in the construction field.

You can find out more information about getting a California contractor’s license by giving us a call.  We’ll give you all the latest information and you need to successfully pass your contractor license exam.

4 thoughts on “Top 10 Reasons to get a Contractors License

    • Susan Vincent says:

      The Contractors State License Board is a separate entity from the California State Franchise Tax Board and Internal Revenue Service (IRS) federal government. To the best of my knowledge you would not be denied a contractor license if you have passed the California State Exam. However, you must comply with the requirements and pay the necessary fees associated with obtaining your contractors license for the State of California.

  1. Eli Richardson says:

    I found it interesting when you talked about applying for a contractor’s license and how it could boost your professional career. Recently, my brother said he’d like to learn about HVAC systems. My brother wants to start his HVAC repair business one day, so I think he should read your article first. Thank you for the advice on licensed contractors and how they could start their own business.

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