Bonding capacity isn’t driven by perfect financials.

Many contractors assume their reviewed financial statements need to be flawless to increase bonding capacity. In reality, sureties are far less focused on perfection than they are on clarity, consistency, and how well the numbers reflect how the business actually operates.

Bonding Capacity Is About Clarity — Not Perfection

If you compared reviewed financial statements from ten different accounting firms, you’d likely see ten slightly different presentations. Differences in footnote wording, estimates, and formatting are normal. “Perfect” financials don’t exist.

What does matter is that the statements are accurate, easy to follow, and clearly reflect construction-specific realities.

Problems tend to arise when financials are prepared by firms that don’t regularly work with contractors. Common issues we see include missing or generic footnotes, job schedules that don’t clearly tie to project performance, or working capital that isn’t presented in a way that helps underwriters understand liquidity.

When a surety underwriter receives financials that are confusing or obviously not tailored to construction, it creates friction. Underwriters may take a more conservative view, limit capacity, or miss context that could otherwise support stronger bonding terms.

Why construction-specific reporting matters

Surety underwriters don’t simply “accept” financial statements as-is. They adjust them, evaluating working capital, equity, underbillings, related-party balances, and other risk indicators.

Clear presentation makes it easier for underwriters to understand what’s happening in the business and identify strengths that support capacity.

The goal isn’t to hide risk or overstate results. It’s to provide financial information that is complete, transparent, and decision-ready so underwriters can get comfortable more quickly and confidently.

AI Prompt for Contractors

An example of how AI tools can be used to support internal review and decision-making.

“Review the attached financial statements and identify items a surety underwriter may adjust when evaluating working capital and net worth. Flag areas that may require additional explanation.”

This can be useful when preparing for bonding conversations or reviewing financials internally before they’re shared.