WHAT DOES IT ACTUALLY
TAKE TO GET
BONDED?
Surety underwriters don't just look at revenue — they look at working capital, current ratio, debt-to-equity, and provable profitability. Most subcontractors who get turned down for bonding have the revenue to qualify but the balance sheet to disqualify. The fix is financial infrastructure, not more contracts.
Bonding capacity is the ceiling on what work you can bid. A $5M subcontractor with $7M aggregate capacity can chase $5M single jobs. One with $2M capacity is locked out of half the market. The difference isn't usually revenue — it's balance sheet quality. Surety underwriters are reading three ratios and a WIP schedule. Most subcontractors don't know what they're looking at.
THE THREE NUMBERS
THAT GET YOU BONDED.
Working capital is current assets minus current liabilities. A subcontractor with $800K in AR, $200K cash, and $600K in current payables has $400K in working capital. That number determines how much aggregate bonding capacity a surety will extend. $1 of working capital typically supports $10–$15 of bonding capacity.
Most common disqualifier: AR that's 90+ days old counted as a current asset. Surety underwriters often net out slow AR. A contractor who thinks they have $600K in working capital may actually have $300K after the underwriter adjusts for uncollectable receivables.
WHY SURETY UNDERWRITERS
WANT YOUR WIP.
A WIP schedule — work in progress report — shows the underwriter whether your billings are ahead of or behind your costs on every active project. Over-billed jobs look like liabilities. Under-billed jobs look like assets. An under-billed contractor appears less financially healthy than they are. An over-billed contractor appears stronger — until the jobs close and the real numbers surface.
Billing Ahead of Costs — Short-Term Asset
When you bill $400K and have spent $300K in costs on a $1M job, you're overbilled by $100K. That shows up as a liability on the WIP — you owe performance on work already collected for. Underwriters weight this carefully.
Costs Ahead of Billing — Hidden Asset
When you've spent $300K and only billed $200K, you have $100K of unbilled work — a legitimate asset the underwriter should see. If your WIP schedule isn't current, this asset is invisible. Many subcontractors get worse bonding terms because their financials don't show their real position.
WHAT CFOS DOES
FOR BONDING CAPACITY.
A $13.5M marine contractor went from a $2.3M business valuation to $5.5M in nine months — using the same revenue and same crews — by implementing clean financial reporting. The improvement in provable, documented profitability drove both the valuation and the bonding capacity expansion. See the case study →
