BONDING READINESS FOR SUBCONTRACTORS.
Sureties don't look at revenue. They look at four things: working capital ratio, typically 20% or more of the largest single project, net worth quality with cash and AR strong and intangibles weak, WIP schedule accuracy with defensible POC math and consistent gross profit recognition, and 3-year financial trend stability. Your bonding capacity follows from your balance sheet, so revenue growth on its own will not raise it.
Bonding capacity isn't something you ask for. It's something your financials produce. A surety underwriter is answering one question, which is whether this company can finish the work if the work goes badly, and the balance sheet answers it before anybody reads a resume. Two subs with identical revenue can be millions apart in aggregate capacity because one has reviewed statements, clean working capital, and a WIP schedule that ties out, and the other has compiled statements and a related-party receivable nobody can explain.
WHAT IT MEANS.
Bonding readiness is the cumulative result of operating disciplines that produce surety-friendly financials month after month, rather than a single document or filing.
The underwriter reads four things in a fixed order, and the WIP schedule takes more of their time than any other single document. Everything on this page is about making those four things boring to read. Boring is what buys capacity.
THE FOUR THINGS THEY UNDERWRITE.
Working capital ratio
Sureties look at working capital, meaning current assets minus current liabilities, against the largest single project bond being requested. The standard underwriting target is working capital of at least 20% of the single project amount, so a $3M single project bond means at least $600K of working capital, and $5M means at least $1M. Quality counts too: cash and current AR count fully, inventory counts at a discount, WIP under-billing and over-billing count depending on direction, and related-party receivables and intangibles get discounted heavily or excluded.
Net worth quality
Stated net worth and tangible net worth aren't the same number. Sureties look at tangible net worth after stripping goodwill, intangibles, related-party receivables, deferred tax assets, and questionable inventory, so a balance sheet showing $2.4M stated net worth might only support $1.6M of tangible net worth after those adjustments. Cash position, current AR with strong aging, equipment with clear titles and current valuations, and retained earnings growth over multiple years strengthen it, while heavy intangibles, related-party transactions, single-customer concentration above 35 to 40%, and AR aged past 90 days weaken it.
WIP schedule accuracy
Sureties spend more time on the WIP schedule than on any other single document. They want POC math that ties to the income statement, gross profit recognition that's consistent across projects, billings-in-excess and costs-in-excess movement that makes sense for the project type, no margin pickups that look like loss adjustments, and project-level data that reconciles to the books. The common red flags are gross profit jumping 5 or more points from the prior period without explanation, large adjustments between draft and final WIP, costs-to-complete that haven't been updated in months, and projects that close out at margins materially different from how they progressed.
3-year trend stability
Sureties want to see consistent or improving trends across 3 years: revenue growth that's sustainable, gross margin stability, net worth accumulation, and working capital growth keeping pace with revenue. They read year-over-year revenue swings beyond 25% as instability, along with gross margin variation of 5 or more points between years, retained earnings decreases, working capital decreases despite revenue growth, and large related-party transactions that change between years. One volatile year is explainable and three volatile years are a decision.
WHAT IT LOOKS LIKE IN DOLLARS.
Compiled financials with $400K working capital and $1M net worth support a single project of $500K to $1M and an aggregate of $1.5M to $3M. Compiled financials with $1M working capital and $2M net worth support a single project of $1M to $2M and an aggregate of $3M to $5M. Reviewed financials with $1.5M working capital and $3M net worth support a single project of $2.5M to $4M and an aggregate of $6M to $10M. Reviewed financials with $2.5M working capital and $5M net worth support a single project of $5M to $8M and an aggregate of $12M to $20M. Audited financials with $5M or more working capital and $10M or more net worth support a single project of $10M to $25M or more and an aggregate of $25M to $50M or more.
THE STRUCTURE UNDERNEATH IT.
WIP schedules get produced monthly with the POC math reviewed and validated. Project managers update costs-to-complete every month, and gross profit recognition is reasoned and documented rather than assumed. That documentation is what turns an underwriter question into a one-sentence answer.
Compiled-only financials severely limit bonding capacity. Reviewed financials open access to $5M to $10M aggregate, and audited financials open access to $15M to $30M or more aggregate depending on trade and surety relationship. The cost of the upgrade is usually smaller than the capacity it unlocks.
The cash cycle gets managed, AR aging gets tracked, and retention release gets pursued instead of waited on. Working capital growth should run ahead of revenue growth rather than behind it. A year where revenue grew and working capital shrank is the profile an underwriter cuts capacity on.
No single GC or owner should sit above 35 to 40% of revenue. Diversification by client and by trade scope reduces the risk the underwriter is pricing. It also means one bad relationship can't take the company down with it.
Intangibles get minimized, related-party transactions get documented at arms length, equipment titles stay current, and prepaids get amortized properly. Every unexplained line on a balance sheet costs capacity, because an underwriter discounts what they can't verify. Clean is worth more than big.
Quarterly check-ins, transparent communication on project performance, and advance notice of capacity needs are part of the work. Sureties extend more capacity to subs who manage the relationship before they need something from it. The first call should never be the one where you need a bond by Friday.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
Pricing
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
FREQUENTLY ASKED.
