CONSTRUCTION BONDING CAPACITY, EXPLAINED.
Working capital, current assets minus current liabilities, is the single biggest driver of aggregate bonding capacity, and sureties typically apply a multiple to available working capital to set the maximum program they're comfortable extending. Net worth and the working capital ratio complete the picture, with a ratio near or below 1.0 signaling thin coverage and 1.5 or higher signaling a healthier cushion. The quality of the reporting behind those figures moves the answer as much as the figures themselves do.
Two subcontractors with the same revenue and the same working capital can get different answers from the same surety. The one with a record of clean, reconciled statements and a WIP schedule that ties to those statements gets the larger program. The other one gets questions. Underwriters are buying confidence in your numbers alongside the numbers themselves, which is the part most owners never hear said out loud. It's also the part you can improve without raising a dollar of new capital, which makes it the cheapest work on the list.
WHAT IT MEANS.
Bonding capacity is the maximum aggregate and per-project bond amount a surety will extend, and it's determined primarily by working capital, net worth, and a working capital ratio in the healthy range, generally 1.5 or higher.
Bonding capacity isn't one number. There's an aggregate figure, meaning everything you can have under bond at once, and a single-project figure, meaning the largest job the surety will write. The two move together but not at the same rate, and a sub who only knows the aggregate can still get stopped on a job that fits inside it.
WHERE IT GOES WRONG.
Bonding capacity is basically just about revenue size
Revenue counts for less here than working capital, net worth, and the working capital ratio. A smaller company with strong capital can support a larger program than a bigger company with thin capital. That's why two subs at the same top line get different answers, and it's why pursuing revenue in order to raise capacity works backwards.
Our capacity is fixed until we have a lot more cash
Capacity can improve through consistent, reconciled reporting and a cleaner WIP schedule without a large increase in working capital. The underwriter is buying confidence in the numbers, and confidence is something you can build in a few months of disciplined closes. Working capital and net worth stay the primary drivers, but they aren't the only lever you have.
The surety just decides what they decide, there's no real formula
Sureties apply fairly consistent underwriting logic built on working capital, net worth, and the working capital ratio. It's not a mood and it's not a relationship favor. Once you know which inputs the decision is based on, you can watch those inputs monthly and know roughly where you are before you ever ask.
WHAT IT LOOKS LIKE IN DOLLARS.
That's the working capital ratio that reads as a healthy cushion to most sureties. Near or below 1.0 reads as thin coverage and it constrains the program they will write. The CFOS target is 1.5, tracked every month rather than reviewed once when renewal comes around.
WHAT COUNTS MOST.
Working capital gets tracked every month against the 1.5 CFOS target ratio rather than reviewed only when renewal comes around. Net worth and balance sheet strength get reported consistently, month over month, so the trend is visible instead of reconstructed. A figure you look at once a year is a figure you can't manage.
The WIP schedule has to tie cleanly to the financial statements every reporting period, not approximately and not once at year end. A WIP that doesn't reconcile is one of the fastest routes to extra underwriting questions or a cut in the program. When the two agree by construction, the underwriter has nothing left to follow up on.
The forecast models how the growth plan will move available capacity before the plan is committed, so a capital ceiling gets found on a spreadsheet rather than after a bid is submitted. Clean, consistent financial reporting is held as a regular practice rather than a pre-renewal project. That combination is what stops capacity from deciding your bid list for you without anybody voting on it.
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. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Under $1M | $1,900 to $3,300 | $1,000 |
| $1M to $3.5M | $2,600 to $5,300 | $1,500 |
| $3.5M to $6.5M | $3,800 to $8,300 | $3,000 |
| $6.5M to $9.5M | $5,100 to $11,800 | $4,500 |
| $9.5M to $12.5M | $6,100 to $14,900 | $6,000 |
| $12.5M to $15.5M | $7,400 to $17,650 | $7,500 |
| $15.5M to $18.5M | $9,400 to $22,400 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
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. The onboarding fee is right here in the table.
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 and never in a report.
Your bookkeeper still does the books.
Every job shows its margin while it is still open.
Everything in Core, plus the bookkeeping and bank reconciliations done for you, and the job costing and WIP software set up, loaded with your cost codes, and managed every month. Use your own online software, or move to ours and we cover it.
A bookkeeper we choose does the books and reconciliations. No payroll.
You approve, and the money side gets handled.
Everything in Strategic, plus a controller we choose who handles your bills and receivables for you the way an in-house controller would. They call vendors, pay the bills and keep the accounting current. We plan the cash flow first, and you approve every payment because it is your money.
A controller we choose does the payables and receivables. No payroll, no pay applications, no collections.
FREQUENTLY ASKED.
