WHAT DOES A SURETY ACTUALLY NEED TO BOND YOUR COMPANY?
Most subcontractors know they need bonding to pursue larger commercial work. Fewer know what a surety requires to approve a $2M single project bond or a $7M aggregate. The answer is financial. Surety1's 2025 performance bond underwriting requirements put adjusted working capital at 5 to 10 percent of the current cost to complete across all open jobs and net worth at 10 to 20 percent of that same figure. CFMA's 2023 surety prequalification guidance puts the current ratio minimum standard at 1.15 to 1.20 against a construction industry mean of 1.7. Behind both is the question of who produced the statements, CPA reviewed or audited depending on the bond level.
None of that's a bonding problem. It's a bookkeeping problem wearing a bonding jacket. A surety is reading a balance sheet and a WIP schedule to work out how much of your backlog it could finish without you. Working capital is the money it would use, the current ratio is how fast you could free that money up, and the WIP tells it whether your percent complete figures can be trusted at all. Get those three right and the capacity follows.
WHAT IT MEANS.
Bonding capacity is a financial outcome, the dollar value of work a surety will back, set by your working capital, your current ratio, and the quality of your financial statements.
Every threshold on this page is a representative range. Actual limits vary by surety, by trade, and by how long the relationship has lasted, so two subs with the same balance sheet can get different answers from the same underwriter. What doesn't vary is which numbers get read first, and in what order.
THE FOUR THINGS THEY UNDERWRITE.
Working capital, the primary metric
Most sureties use a working capital multiplier to set aggregate bonding capacity, and a common rule is that 10x working capital equals available aggregate bonding. A subcontractor with $700K in working capital can support approximately $7M in aggregate bonding. Below $300K in working capital, bonding becomes difficult regardless of revenue.
Current ratio, floor 1.15 to 1.20 and mean 1.7
Current ratio is current assets divided by current liabilities. The Construction Financial Management Association's 2023 surety prequalification guidance sets the minimum standard at 1.15 to 1.20 and reports a construction industry mean of 1.7, with anything above 1.20 reading as active debt management and a ratio closer to 1.50 suggesting strong trade partner relationships. CFMA is explicit that no perfect formula exists and that underwriters measure risk differently, so those are reference points rather than a pass mark. A current ratio that has been declining across three or four years tells the surety the company is consuming working capital faster than it builds it, and that reads as risk whatever the absolute number happens to be.
Financial statement quality
Single project bonds up to $1M typically accept financial statements the company produces in house. Bonds of $1M to $3M usually require CPA-compiled or reviewed statements, bonds above $3M to $5M typically require CPA-reviewed statements, and bonds above $5M require audited statements at many sureties. The quality of the statements, meaning WIP accuracy, a clean balance sheet, and consistent accounting policies, counts as much as the numbers themselves. Surety1 states the point directly: a statement issued by a CPA, especially at review level, holds materially more weight with an underwriter than one produced in house.
The work-in-progress schedule
Every surety underwriter will ask for the WIP schedule, because it shows what's under contract, what's complete, what's billed, and what the projected margin is on open jobs. A WIP that doesn't reconcile to the financial statements, shows large unexplained overbilling, or has no per-job margin data will delay or deny the bond application. That holds regardless of how strong the working capital position looks.
WHAT IT LOOKS LIKE IN DOLLARS.
The core surety math is working capital at or above 10% of bonded backlog. A sub wanting $7M of aggregate capacity needs roughly $700K of clean working capital, and there's no way to talk around it in a meeting. The bonding number is an output of the financial system rather than a favor from the agent. Surety1's 2025 performance bond underwriting requirements, at https://surety1.com/performance-bond-underwriting-requirments/, state the same test against a tighter denominator: adjusted working capital of at least 5 to 10 percent of the current cost to complete across all open jobs, plus net worth of 10 to 20 percent of that cost to complete. Cost to complete is the spend still ahead of you rather than the full contract value, so calculate both figures and use the larger of the two.
One verified marine client, a general contractor at $25M in revenue, kept its ledger in a shared Excel file and couldn't get bonded at all, because the financials were too messy for any surety to trust. SPM rebuilt the accounting system, and within weeks the company had $5M single-project bonding and $10M aggregate, with a $4.5M credit line in progress. Same company, same work, and legible numbers.
A second verified marine client at $13.5M in revenue went from 7% to 14% net profit across nine months of clean, documented reporting. The same documentation that took the valuation from $2.3M to $5.5M is what a surety underwrites on. Bonding readiness and exit readiness are the same project wearing two different hats.
WHAT THEY LOOK AT IN YOUR TRADE.
Sureties read a civil sub's equipment schedule like a credit report: what's owned, what's financed, and what the debt service does to working capital. Heavy equipment debt that looks fine to a bank can hurt a bonding ratio, because the next twelve months of payments are in current liabilities. How the equipment finance is structured is a bonding decision and not only a purchasing one.
Sureties bond concrete subs on the quality of the WIP schedule, because overbillings, underbillings, and profit fade history tell them whether your percent complete numbers mean anything. A clean WIP with stable margins gets capacity. A WIP showing fade on every closed job gets declined regardless of what the balance sheet says.
Specialty sureties weigh backlog concentration heavily. One GC at 70% of revenue, or one mega-project dominating the book, reads as risk even behind strong financials. Diversification across GCs and project sizes expands capacity at the same financial position, which makes it one of the cheapest moves available to a sub.
Subs seeking a first bond face the steepest documentation curve: two to three years of financials, a current WIP, personal financials, and often CPA-issued statements. Pulling that together takes a quarter when the books are clean and a year when they aren't. That's why the bonding conversation should start before the bonded opportunity comes along.
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.
