All posts by Surety Bond Professionals

How Sureties Evaluate Federal Contractor Bonding Capacity

Federal contractors continue to benefit from significant opportunities as infrastructure funding, defense spending, and public investment generate new construction projects across the country. At the same time, sureties are placing greater emphasis on a contractor’s financial strength, operational capacity, and long-term ability to manage growth. If you’re pursuing federal work, understanding how sureties evaluate your business can help position your company for increased bonding capacity and larger project opportunities. At the core of every surety underwriting decision are the “3 Cs” of surety: Character (reputation and integrity), Capacity (operational capability), and Capital (financial strength). These principles have guided surety underwriting for decades. Today’s federal contracting environment simply requires contractors to demonstrate each of them in new and increasingly sophisticated ways. Planning to Pursue Larger Federal Projects? Wondering if your current surety program can support your growth plans? A complimentary Bond Capacity Review can help identify opportunities to strengthen your bonding capacity before your next bid. 👉 Request A Surety Program Review Financial Strength and Working Capital Working capital, equity, profitability, and cash flow remain the foundation of every surety program. Federal projects often require contractors to finance payroll, materials, equipment, subcontractors, and mobilization costs well before receiving payment, making...

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How Much Does a Surety Bond Cost?

A surety bond is the broad category, and contract bonds are the type most commonly used for construction projects. Construction bond is another common term for a contract bond. Estimated Premium Reference Table Bond Amount Estimated Premium Range (0.5%–3.0%) $250,000 $1,250 – $7,500 $500,000 $2,500 – $15,000 $1,000,000 $5,000 – $30,000 $5,000,000 $25,000 – $150,000 $10,000,000 $50,000 – $300,000 Qualified contractors with strong financial statements and proven experience often secure rates near the lower end of this range, while newer contractors or those with weaker credit or financials may pay higher premiums. Surety Bond Cost at a Glance Factor Breakdown Typical Cost 0.5%–3% of the total bond amount $1 Million Bond Approximately $5,000–$30,000 Lowest Rates Contractors with strong financial statements, excellent credit, and proven experience Highest Rates New contractors, weaker credit, limited working capital, or higher-risk projects Primary Pricing Factors Financial strength, credit history, bond type, project size, contractor experience, and project risk Is the Premium Refundable? No. The premium is a one-time fee paid to the surety company for providing its financial guarantee What Is a Surety Bond? A surety bond is a three-party agreement between the contractor or business (principal), the project owner or government entity (obligee),...

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What Are the Best Surety Bond Companies for General Contractors?

General contractors looking to bid larger projects, expand into public work, increase their bonding capacity, or qualify for larger performance and payment bonds often ask the same question: “What are the best surety bond companies for general contractors?” The answer may surprise you. There is no single “best” surety company for every contractor. In fact, one of the biggest misconceptions in the construction industry is that contractors should simply find the largest surety company and apply for a bond. The reality is that every surety company has different underwriting appetites, risk tolerances, industry preferences, and growth objectives. A surety company that is eager to support one contractor may not be interested in another, even if both companies appear similarly qualified on paper. That’s why successful contractors focus less on finding the biggest surety company and more on finding the right underwriting partner. Quick Answer There is no single best surety bond company for general contractors. The right surety depends on a contractor’s financial strength, project size, industry, backlog, and growth objectives. Because every surety company has different underwriting appetites, contractors typically work with a specialized surety agency to identify the markets best suited to their business. In many cases,...

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Maximizing Bonding Capacity as a Federal Contractor

For many growing federal contractors, increasing bonding capacity is the key to qualifying for larger government contracts. While credit-based (Fast-Track) bond programs are an excellent starting point, they eventually limit growth through lower single-project limits, rigid aggregate caps, and higher premium rates. To compete for larger federal opportunities, contractors typically transition to a standard surety program that evaluates the financial strength, operational capacity, and experience of the entire business rather than primarily relying on the owner’s personal credit. The result is higher single-project limits, significantly greater aggregate capacity, more competitive premium rates, and the flexibility needed to win larger federal construction contracts. Quick Answer: How Do Federal Contractors Increase Bonding Capacity? Federal contractors increase bonding capacity by upgrading to CPA-reviewed financial statements, maximizing working capital (Current Assets minus Current Liabilities), retaining earnings to build tangible net worth, and demonstrating a clean track record of completing progressively larger projects. Sureties evaluate your business across the Three Cs—Character, Capacity, and Capital—to determine higher single-project and aggregate bonding limits. Credit-Based Bond Programs vs. Standard Surety Programs While credit-based programs bypass deep corporate analysis to issue fast bonds for smaller jobs, a standard surety program requires a comprehensive underwriting evaluation of your entire...

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Key Action Items to Achieve an Effective Bonding Program

With the new $1.2 Trillion Infrastructure Bill in Manufacturing, Construction, and Energy passed, many contractors are looking for ways to diversify their backlog with government contracts so their businesses can remain operational during an economic recession and/or another potential industry slowdown. A major attraction to public work is that government construction projects are always available and the fact that payment is almost guaranteed. The Federal Prompt Payment Act protects all tiers of contractors, subcontractors, and suppliers from late payments on federally funded construction projects. Though it would be naïve to suggest that payment is made 100% on time, the projects are ALWAYS 100% financed. There is no fear of banks cutting off financing or owners running out of money. One of the requirements for bidding and performing public work is surety bonding. Under the Miller Act, construction bonds are required for contractors performing on federal projects over $100,000. Similarly, every state has its own “Little Miller Act” which specifies the contract amount above which construction bonds are required. The different types of construction bonds that will be required are: Bid Bonds, Performance Bonds and Payment Bonds. To be successful in the public arena, the single most important thing a...

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What Contractors Need to Know About Bonding for Charging Stations

For contractors, electric vehicle charging station work under the Bipartisan Infrastructure Law (BIL) is still very much alive going into 2026. But the program has been slower and more politically bumpy than originally advertised. Here’s what that means for workload and bonding. Where do the BIL’s EV charging station goals stand today? The big-picture goal hasn’t changed. BIL earmarked $7.5 billion for EV charging, split between: The NEVI Formula Program – about $5 billion (FY 2022–2026) to help states build a national fast-charging network along highway “alternative fuel corridors,” and Charging & Fueling Infrastructure (CFI) grants – $2.5 billion in discretionary grants for both corridors and community charging. Both programs support the original federal goal of a convenient, reliable network of 500,000 public chargers by 2030.   Nationwide, public charging ports have more than doubled since 2021, reaching over 200,000–220,000 ports by early 2025, thanks to a mix of private and public investment. However, BIL-specific buildout has lagged. According to the Government Accountability Office review, only 384 ports (at 68 stations in 16 states) had been built by April 2025 under the $7.5B federal charging station programs. Why are there slow rollouts? If you’re wondering what’s to blame for...

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New Mexico Construction Bidding Process

Surety Bond Professionals is a family-owned and operated bonding agency with over 100 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs.  What is the Bid Process in Construction? The construction bidding process involves five steps: bid solicitation, bid submission, bid selection, contract formation, and project delivery. For a contractor in New Mexico to achieve success in the construction bidding process, you need to plan and improve in each of these areas.  If you’re a new contractor or are looking to secure more bids more often, follow our guide below.  What Should a Construction Bid Include? Successful construction bids generally contain the total cost of building the structure, including expenses for subcontractors, general contractors’ costs, overhead profit, and scope of work. A bid will also need to contain information such as company details, the date, a clear definition of the work, and a project name. Without all of these elements combined, you may not meet the necessary standards.  How Do You Estimate a Construction Bid? An accurate estimate is not only vital for winning a bid, but it can also determine which...

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New Jersey Construction Bidding Process

Surety Bond Professionals is a family-owned and operated bonding agency with over 100 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs.  What is the Bid Process in Construction? The construction bidding process involves five steps: bid solicitation, bid submission, bid selection, contract formation, and project delivery. For a contractor in New Jersey to achieve success in the construction bidding process, you need to plan and improve in each of these areas.  If you’re a new contractor or are looking to secure more bids more often, follow our guide below.  What Should a Construction Bid Include? Successful construction bids generally contain the total cost of building the structure, including expenses for subcontractors, general contractors’ costs, overhead profit, and scope of work. A bid will also need to contain information such as company details, the date, a clear definition of the work, and a project name. Without all of these elements combined, you may not meet the necessary standards.  How Do You Estimate a Construction Bid? An accurate estimate is not only vital for winning a bid, but it can also determine which...

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Lien Laws vs. Payment Bonds

In today’s market, getting paid in full and on time is the exception, not the rule, causing significant cash flow challenges for construction contractors. In fact, surveys show that fewer than 10–12% of contractors always get paid on time according to the terms in their contracts, while more than 80% regularly face slow payments. (The average payment time is 74 days.) That unfortunate reality is why two tools, payment bonds and mechanics liens, are critical for subcontractors, suppliers, and the general contractors who manage them.   Surety Bond Professionals is a family-owned and operated bonding agency with over 100 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs.  What are payment bonds? A payment bond is a surety bond issued on behalf of the prime contractor to guarantee payment of subcontractors, laborers, and suppliers for their work and materials, even if the contractor runs out of cash or goes bankrupt. On publicly funded projects, federal Miller Act and state “Little Miller Act” laws generally require payment bonds above certain contract values because mechanics liens cannot be filed against public property. On private...

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