WHY CONSTRUCTION CONTRACTORS CANNOT GET BONDED, AND HOW TO FIX IT.
A surety bond limit that's too low to pursue the projects you want is a financial infrastructure problem rather than a market problem. Sureties say no for specific, documented reasons: working capital below threshold, no WIP schedule, no reviewed financial statements, or insufficient completion history. Each blocker has a specific fix. The contractor who builds the financial infrastructure gets the bonding capacity. The one who doesn't stays limited to the project sizes that don't require bonds.
Nobody at the surety is trying to hold you back. The underwriter is making a bet on completion, and the only thing they have to bet on is the package your agent puts in front of them. When that package is a tax return and a verbal update, the answer is a small limit, because a small limit is the safe read of thin information. When it's a current WIP schedule, a clean balance sheet, and twelve months of consistent monthly reporting, the same business underwrites at a different number. The business didn't change. The evidence did.
WHAT IT MEANS.
Bonding capacity is the dollar limit a surety will write for a contractor, and the underwriter sets it off four things: working capital, a current WIP schedule, the grade of the financial statements, and documented completion history.
Clients who run CFOS present a fundamentally different financial picture to a surety: a clean monthly close, current WIP, an accurate balance sheet, and documented cash flow. The bonding capacity improvement is a natural outcome of the financial control system rather than a separate project with its own budget.
WHY THE UNDERWRITER SAID NO.
Working capital below the surety minimum, the most common blocker
Sureties use working capital, current assets minus current liabilities, as the primary measure of a contractor's ability to fund a project through completion. Most sureties require working capital of at least 10 to 15% of the requested single-project bond limit, so a contractor asking for a $1M single-project limit needs $100,000 to $150,000 in working capital on the balance sheet. When it's below that threshold because the LOC is drawn, because AP is piled up, or because the balance sheet hasn't been updated to reflect current performance, the surety declines or limits capacity. The fix is cleaning the balance sheet: collect outstanding AR, pay down the LOC, and present the balance sheet at its current value instead of the value from six months ago.
A WIP schedule that's inaccurate or missing
Sureties underwrite construction contractors off WIP. If you can't produce a current WIP schedule showing all active projects, contract value, billed to date, earned to date, and the overbilling or underbilling position, the surety can't underwrite you at all. A contractor without WIP is asking a surety to take a risk the contractor itself has no visibility into. Most sureties won't issue new bonds without current WIP from the most recent fiscal quarter. The fix is WIP reporting produced from closed books monthly, and it doesn't have to be perfect from day one, it has to exist and it has to be consistent.
No reviewed or audited financial statements
Sureties at higher capacity levels require CPA-reviewed or CPA-audited financial statements. A contractor whose financials are produced in house can typically access $500,000 to $1M in single-project limits with a strong relationship. Beyond that, reviewed statements at $3,000 to $6,000 annually are typically required, and audited statements at $8,000 to $15,000 annually are required above $5M to $10M single-project limits at most sureties. If you're stuck against a capacity ceiling, upgraded statements are often the specific unlock.
No history of clean project completions
Sureties are underwriting project completion risk. A contractor with a short operating history, no documented project completions, or a record of disputes and claims is a higher risk regardless of financial position. The fix here is time plus documentation: clean completions delivered on schedule, inside budget, and without disputes. The surety relationship gets built over years, and the contractor who starts it at $2M revenue and manages it properly reaches $8M revenue with a surety who has 6 years of clean completion history and will write $7M single-project limits.
WHAT IT LOOKS LIKE IN DOLLARS.
At the standard 10 to 15% requirement, a $1M single-project limit needs $100,000 to $150,000 of working capital sitting on the balance sheet when the underwriter looks. That's current assets minus current liabilities, so a drawn LOC and a stacked AP both cut it directly. Two weeks of hard AR collection and an LOC paydown from those collections can move the same balance sheet across the threshold without a dollar of new profit.
At $3M to $5M revenue, reviewed statements cost $3,000 to $6,000 annually and typically unlock a 2 to 3x increase in bonding capacity. Audited statements run $8,000 to $15,000 annually and are what most sureties require above $5M to $10M single-project limits. The upgrade is the cheapest capacity a contractor stuck at a ceiling can buy, and the timing is the catch: plan it 12 months ahead of when you need the limit.
WHAT MOVES THE LIMIT.
This is the single most useful near term action. A current WIP schedule produced monthly from closed books demonstrates financial control to the surety in a language they already read. It doesn't require upgraded financial statements, it requires clean books and a consistent methodology applied the same way every month.
Collect outstanding AR aggressively and pay down the LOC out of those collections rather than additional draws. The working capital ratio, current assets divided by current liabilities, should sit above 1.3x. Below 1.0x is a bonding disqualifier at most sureties, however good the story around it is.
If you're consistently running at or above your current aggregate limit, reviewed statements are the next investment to make. The cost is knowable and the capacity increase is usually multiples of it. Do it on your schedule instead of in the middle of chasing one specific bond.
Your surety agent isn't the underwriter. The underwriter at the surety company makes the capacity decision off the financial package your agent presents. SPM builds that package, meaning WIP, balance sheet, backlog, and cash flow, so the underwriter sees the business at its strongest rather than its weakest.
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.
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