By Dan Auld
San Diego, December 4, 2011 — Will Rush Limbaugh save the solar industry? It looks that way for Toni Lynch in Allentown, Pennsylvania and Spiro Basho in Hicksville, New York.
That’s a hoot, given Limbaugh’s well-known antipathy toward anything remotely resembling renewable energy. Limbaugh has repeatedly taken to the airwaves to slam solar. But Lynch and Basho are both listeners, and Ox Bonding, a Florida financial firm, advertises on local stations that run the Limbaugh show, although not direct Limbaugh advertisers.
Like lots of other solar installers, the financial tsunami of 2008 wiped out many customers of both Lynch and Basho. And like a lot of other electrical contractors, through no fault of their own, they not only lost business, they lost their access to credit.
“When you see people on TV talking about green jobs or any kind of jobs, here’s what they usually do not know: Small contractors need a bond,” said Lynch. “And a bond is really a line of credit. And a lot of contractors just don’t have the cash or the credit score to do that anymore because of the crash of 2008. So they lose work, especially government work where bonds are required. And most people do not know that,” Lynch said.
He continues: “I was bidding on a solar installation job, part of the stimulus program, and I knew I needed a bond. Seven companies turned me down. I had just about given up when I was driving around listening to Rush Limbaugh. The commercial talked about how contractors could not get bonds anymore, but this company could do it. I told my wife, ‘wouldn’t that be good if they were telling the truth.’ They were.”
Sprio Basho had a similar experience in New York. This electrical contractor lost a lot of work in 2008, but he did what he had to do to hold on. “I might have been listening to the same commercial because I had the same problem,” Basho said. “I had been in business a long time. Did good work. But all of a sudden the bonding disappeared. I thought my business was going to disappear too because we were counting on installing solar to stay alive.”
And both Lynch and Basho were able to stay alive, because they were able to get bonds from the company advertising on the stations running Limbaugh, Ox Bonding. As a result, Basho’s company won a contract installing solar panels in a school district. Lynch’s firm was awarded a $1.8 million contract for several solar installations in Pennsylvania and New Jersey.
All because of Rush, and because of what happened at Robert Berman’s kitchen table when he was a teenager. “I listened to an insurance broker tell my dad he could not accept a bigger job because he did not qualify for a bond,” said Berman, co-founder of Ox Bonding. “My dad was a building contractor who did great work and had great references, but that was not enough for that insurance company. That’s why I started a bonding company for small contractors: There are a lot of good companies out there that do good work, with good records, and their customers love them. So we write their bonds and make sure they get working capital, too.”
Berman is not running a non-profit agency. He knows his company takes a risk every time it provides working capital; every time it writes a bond for a contractor. A bond guarantees that the contractor will finish the job and pay the subcontractors. If not, the job owner gets relief from the bonding company, which in turn can try to get its money back from the contractor.
“That’s why we look under the hood, check the books, call the customers, and really take a hard look if the company can do the job,” Berman said. “Our underwriters are experienced contractors, not just accountants. So they have a good idea of who is able to do what, and what the risk really is.”
To reduce its risk even further, Ox Bonding controls the distribution of funds for the job.
And if the contractor chooses, Ox Bonding can also issue working capital, pay the taxes, take care of payroll, negotiate with suppliers, and free up the contractors for what they really want to do: Build solar.
Dan Auld is a San Diego freelancer who often writes about the solar energy business