The surety will not bond the $1.5 million job until your working capital is higher. Does a line of credit count?

A surety is not lending you money; it is guaranteeing your performance to an owner, and it sizes that guarantee on your balance sheet. The common convention is a single-project limit of roughly eight to twelve times working capital — ten is the usual center — and an aggregate program of fifteen to twenty times. A contractor with $150,000 of working capital is looking at a single-job ceiling near $1.5 million and a program near $2.5 to $3 million.

But not your working capital as your books show it. The surety adjusts: receivables over ninety days come out, overbillings come out, loans to or from the owner come out, and inventory is often discounted. A contractor showing $200,000 on paper may be underwritten at $140,000 after the adjustments, and the bonding limit follows the lower number.

Cash counts. Unused availability on a bank line of credit counts, because it shows a bank has underwritten you and the money is there if a job goes sideways. Clean receivables under ninety days count. Retained earnings that stay in the business count most of all over time.

A short-term cash advance does not count, and it costs you twice: the advance is a current liability that reduces working capital dollar for dollar, and its presence on the statements tells the surety you are borrowing at short-term prices, which is the profile they least want to guarantee. A contractor who takes an advance to look more liquid for a surety has made the number smaller.

A bank line of credit, applied for in a strong quarter with two years of returns and clean job-cost accounting: this is the single most useful step, because the unused availability is liquidity to the surety and the drawn portion funds the very working capital gaps that keep contractors from growing. Then collections: every receivable pulled inside ninety days moves straight into adjusted working capital. Then billing discipline: overbillings come out of the number, so bill to the schedule of values, not ahead of it. Then profit left in the business rather than distributed.

Sureties publish roadmaps for this because they want to write bigger bonds for contractors who can carry them. A year of those four things routinely doubles a program.

Not in the surety's number. A working capital loan or advance is for the job's cash needs after the bond is written — materials before the first draw, payroll while a draw is in the owner's payment cycle — and it should be repaid before the next financial statement the surety sees. A business line of credit from a revenue-based funder is closer, but a surety weights a bank line more. If bonding capacity is the goal, the bank is the right first conversation.