If you’re trying to build your construction business in the state of North Carolina, then getting a general contractor license is important. This license is legally required in North Carolina for contractors who take on projects with a value of $30,000 or more, according to NC § 87-1(a).
The general contractor license is broken down into two categories: limitation and classification. Limitation limits the dollar amount of projects that can be taken, while classification determines what kind of work exactly can be done with the general contractor license.
This post explains the general contractor license requirements — the application and the process — so you can determine which license you need to apply for.
Table of Contents
- Eligibility Criteria
- License Limitations and Financial Requirements
- License Classifications
- Choosing Which Exam to Take
- How to Apply for a North Carolina General Contractor License
- How Long Does It Take to Get Your NC General Contractor License?
- 4 Tips for Succeeding as a Contractor in North Carolina
- Rent Equipment from BigRentz
If you want to become a contractor in the state of North Carolina, you must be able to meet these requirements before you can apply and take the exam for licensure:
- At least 18 years old
- Have a good moral character (as determined by the State Board)
- Provide evidence of financial responsibility (as determined by the State Board)
- Pay the application fee (the amount of which varies by license)
- Consent to a criminal background check if required
Licensee vs. Qualifier
When applying for a general contractor license, you may run across the terms “licensee” and “qualifier” and wonder which one applies to you. The licensee obtains the license and maintains responsibility for it, but the qualifier takes the exam. So the person getting the license doesn’t have to be the same person who sits for the examination, although they can be in some cases.
For example, a company may be applying for a license in North Carolina, so they are known as the licensee or the entity/person who meets the requirements and will be responsible for the license. However, it may be an employee or the owner who sits down to take the exam, and they are known as the qualifier.
It is important to note that for the license to be valid, the qualifier and licensee have to be connected. For example, if the employee who takes the exam for the company ends up leaving, the license the company applied for and got will be invalidated.
License Limitations and Financial Requirements
Within the general contractor license, three levels determine the size of projects you can take. These levels are defined by specific financial criteria. Although you have to prove your financials, you won’t need proof of insurance to apply for the license, but you may need it later on when you undertake projects and submit permit applications.
Proof of assets and surety bonds
To apply for the license, you have to prove your financial stability. You can do this by demonstrating a certain level of assets or providing proof of a surety bond.
If you decide to apply with a surety bond, the bond must have a top rating from A.M. Best or another organization like that. Examples of top ratings would include Superior A++ or A+, or Excellent A or A-.
While regular surety bonds guarantee a project, the bond you apply with must be ongoing and last as long as you have the license, or at least until you can prove you have the working capital required to operate. You’ll need to prove you have the bond when applying for or renewing your license, so keep that in mind.
Below are the three license limitations and the financial requirements needed to achieve each one:
|Tier||Project Limit||Assets Required||Or a Surety Bond of|
|Limited||Projects up to $750,000 each||Have assets that exceed total current liabilities by at least $17,000 or have a total net worth of at least $80,000||$175,000|
|Intermediate||Projects up to $1,500,000 each||Have assets that exceed total current liabilities by at least $75,000||$500,000|
|Unlimited||No dollar limit on the size of the projects that can be undertaken||Have assets that exceed total current liabilities by at least one hundred fifty $150,000||$1,000,000|
You can apply for various license classifications, depending on the type of work you or your company does. You can also apply for multiple classifications, so take a minute to figure out what kind of work you foresee yourself doing. Applying for multiple classifications means taking multiple exams since you need to take one for each of the main classifications and the individual specialty classifications.
The following sections explain the license classifications.
This classification includes everything from construction to demolition. From commercial to residential building construction, as well as site work, it covers every kind of construction, including institutional and industrial. The specialty classifications that you can apply for include S(Concrete Construction), S(Insulation), S(Interior Construction), S(Marine Construction), S(Masonry Construction), S(Roofing), S(Metal Erection), S(Swimming Pools), and S(Asbestos), and S(Wind Turbine).
If you only work on residential construction, this classification allows you to do any sort of construction or demolition that has to do with residential units. You can also work on sidewalks, driveways, and any sort of water system that is connected to a residential unit. The specialty classifications include S(Insulation), S(Interior Construction), S(Masonry Construction), S(Roofing), S(Swimming Pools), and S(Asbestos).
This classification includes all highway construction activity, which means you can pave, fix bridges, and move utility lines. You would also be allowed to pave airport runways and taxiways and install guard rails, fencing, lights, and any other necessary fixtures. The specialty classifications are S(Boring and Tunneling), S(Concrete Construction), S(Marine Construction), S(Railroad Construction), and H(Grading and Excavating).
This will include any sort of work on water and wastewater facilities or any other facilities that are covered by the North Carolina code. The specialty classifications include S(Boring and Tunneling), PU(Communications), PU(Fuel Distribution), PU(Electrical-Ahead of Point of Delivery), PU(Water Lines and Sewer Lines), PU(Water Purification and Sewage Disposal), and S(Swimming Pools).
Specialty classifications are any sort of operations discussed in section 0202 of the North Carolina Administrative Code Title 21, Chapter 12. You may have seen them in the other classifications above, as they often fall under those categories. To become a specialty contractor, you will need to take an extra exam in some cases. The specialty classifications include:
- Boring and Tunneling
- Concrete Construction
- Electrical-Ahead of Point of Delivery
- Fuel Distribution
- Grading and Excavating
- Interior Construction
- Marine Construction
- Masonry Construction
- Metal Erection
- Railroad Construction
- Swimming Pools
- Water Lines and Sewer Lines
- Water Purification and Sewage Disposal
- Wind Turbines
Choosing Which Exam to Take
Before you take the exam, you need to figure out what skills you will need for your contracting business to be successful, as well as what skills are in demand in your area. Once you have a clear idea, you can choose which exams to take.
The Residential Contractor Exam and the Building Contractor Exam are usually the first steps to getting your license, and both exams are 90 questions long and partially open book. Both exams take about three hours, and you must achieve at least 70% to pass.
The Board will also accept the NASCLA exam, from the National Association of State Contractors Licensing Agencies (NASCLA), for the Building Contractor Exam. So you can take this instead if you want.
Here are the contractor exams that are available in North Carolina:
- Asbestos (S)
- Boring And Tunneling (S)
- Building Contractor
- Building Contractor (Spanish)
- Business and Law
- Communications (Pu)
- Concrete Construction (S)
- Electrical – Ahead Of Point Of Delivery (Pu)
- Fuel Distribution (Pu)
- Grading And Excavating (H)
- Highway Contractor
- Insulation (S)
- Interior Construction (S)
- Marine Construction (S)
- Masonry Construction (S)
- Metal Erection (S)
- Public Utilities Contractor (Pu)
- Railroad Construction (S)
- Residential Contractor
- Roofing (S)
- S (Wind Turbine)
- Swimming Pools (S)
- Water Lines And Sewer Lines (Pu)
- Water Purification And Sewage Disposal (Pu)
If you have already taken the NASCLA Building exam or a general contractor exam in Georgia, Louisiana, Mississippi, South Carolina, or Tennessee, then you may be able to apply for an exam waiver. This waiver will allow you to avoid sitting the same or similar exam twice. Keep in mind: Even if you use an exam waiver, you still need to pass the North Carolina Business and Law exam to get your license.
How to Apply for a North Carolina General Contractor License
To begin getting your license, you’ll need to submit a license application through the North Carolina Licensing Board for General Contractors application page. Once you have completed that, you will follow these steps of the application process.
1. Gather the Required Documents
With your application, you will need the following documents to meet the general contracting license requirements so you can submit your application successfully:
- Social Security number
- Contact information
- Business name (if applicable)
- The type of license and classifications
- Disclosure of any criminal convictions and copies of court records (if applicable)
- Financial statements showing financial responsibility and eligibility
- The license fee
- Three letters of reference
Your character references must include:
- The name of the person submitting the reference;
- The mailing address, phone number, and email address of the person submitting the reference
- The date of the reference
- Details on the reference’s knowledge and experience with the applicant“
Character references can not be older or dated past 12 months before the reference is submitted to the Board.
2. Submit the Application and Pay the Required Fees
While you are submitting your application, you will be required to pay a fee. The exact amounts are as follows:
- Limited license: $75
- Intermediate license: $100
- Unlimited license: $125
If you’re simply renewing your license, you will pay a $100 fee to upgrade to an intermediate license, and a $125 fee to upgrade to an unlimited license.
3. Take the Exam
If your documents are all in order, you will be emailed an eligibility letter. This letter allows you to take the exam through the computer-based PSI Examinations. Your letter is valid for 120 days and you can only take one license exam during that time. If you fail, don’t worry. You will be sent information on what you did wrong and you can retake the exam as many times as you need in a 12-month timeframe.
You take the exam in person at a PSI examination center. The format of the exam and the content you’re tested on will vary based on what classification exam you’re attempting to take. To pass, you’ll need at least 70%, and you’ll know your results as soon as you finish your exam.
How Long Does It Take to Get Your NC General Contractor License?
The timeframe for getting your license can vary. You can expect a 2-week processing period, followed by a 30-day wait if you submit an exam with your application, or you’ll have to wait two to three weeks after the exams are completed before your license is granted.
4 Tips for Succeeding as a Contractor in North Carolina
So, you have your license. How do you continue to build and grow your business in North Carolina? These next sections offer some helpful ideas for you.
1. Create a Detailed Business Plan
A good business plan will outline your goals and how to get there. You can figure out the market demand and how you will cater to your customers. A business plan can also help you choose which classifications you get licensed for by stating the types of projects you will accept.
2. Build Your Network
Network with other companies to help build your reputation. From there, you’ll be able to expand on a new client base and hire better, more competent employees.
3. Continue Your Education
To stay a general contractor, you will need to continue your education as some classifications will require eight hours of coursework for a license renewal. This will help you stay up to date with the Board and the changes in their rules, building code, and laws. You’ll also have the opportunity to build your skillset and increase your contracting knowledge.
4. Determine Which Tools and Equipment You’ll Need
Once you outline the services that you offer, you will need to decide on the tools and equipment you need. You can often buy, lease, or rent these tools, depending on your budget. If you’re a newer business, consider cutting costs and renting all of your equipment until your business can grow a bit more.
Rent Equipment from BigRentz
For those contractors looking to rent equipment, BigRentz has a large array of quality machines to choose from. Newly licensed contractors trying to build their business will have plenty of cost-effective options from which to build their equipment supply without breaking their budget.
BigRentz makes construction rentals easy. Browse and request equipment online today!