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Benefits of a Contractor’s License

Licensed contractors experience legal, financial and professional advantages over unlicensed contractors. However, each state has different contractor’s license requirements. Therefore, contractors may seek the help of a contractor’s license service to prepare them for state-specific requirements.


Licensed contractors are legally able to advertise, bid on any job and get permits approved. They can work anywhere in the state as well as in states where out-of-state licenses are honored. Licensed contractors also avoid criminal charges and civil lawsuits, which may include fines and jail time, for conducting unlicensed work.


Licensed contractors’ pay is guaranteed because they have the ability to place mechanic’s liens and force foreclosures on buildings and homes if their fees are not paid in full. In addition, contractors are responsible for the safety, quality and legal compliance of the work they and their subcontractors complete. If they are not licensed, they are not eligible for insurance and bonding, which protect contractors from financial losses.

Having a license also strengthens these individuals’ loan applications and reduces their tax burdens. They may also receive discounts on their supplies. Finally, they are able to save on any personal property repairs and building costs.

Licensed contractors have greater control over their careers because they decide when and how much to work. They also set their own prices. Therefore, they directly control their incomes. In addition, they may subcontract for larger construction companies, expanding their opportunities.


Licensing requires that contractors understand the building process, law and business, making these individuals more competitive because they understand and are able to meet industry standards. Due to its cost and time requirements, licensing shows a contractor’s commitment to their job and industry, which may improve their business relationships.

When you begin your career as a contractor, take advantage of the legal, financial and professional benefits you will gain by pursuing your contractor’s license.