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How much does a surety bond cost?
Surety bond premium is priced from your account, not from a published price list. This guide explains what underwriters weigh when they set your rate, and how to budget bonding into a bid.
Requesting a bond does not affect your credit.
Premium is underwritten, not published
Two contractors bidding the same job can be quoted different premiums, because the surety is pricing the risk that the contract is not completed.
Performance and payment bonds are underwritten together and quoted as one premium tied to the contract price. Rather than a flat percentage, most surety rate schedules use a sliding scale per thousand dollars of contract price, so the effective rate gets cheaper as the contract gets larger. A minimum premium applies on small contracts, and longer contract terms can carry an additional charge because the surety carries the exposure longer.
Bid bonds are priced separately. Because the exposure is limited to the spread between your bid and the next acceptable bid, and it only lasts through the award period, bid bonds are the least expensive bond a contractor buys.
Where the SBA Surety Bond Guarantee Program is used, the SBA guarantee fee is a separate line item paid to the SBA. It is never blended into the surety premium, so ask for both figures when you compare quotes.
What raises and lowers a rate
Underwriting reads capacity, capital, and character. Each of these moves your quoted rate in one direction or the other.
Lowers your rate
- Working capital and net worth that comfortably support the contract size
- Completed bonded jobs of similar scope and dollar value
- Reviewed or audited financial statements, plus a current WIP schedule
- Clean owner credit and no open claims history
- Familiar contract terms with a reasonable schedule and warranty
Raises your rate
- A contract materially larger than anything you have completed
- Losses on open jobs or a backlog stretched past your capacity
- Credit issues, unresolved tax liens, or judgments
- Thin or self-prepared financials with no interim statements
- Heavy liquidated damages, long warranties, or unusual owner terms
The other lever is capacity. A bond pulled comfortably inside your approved bonding line prices better than one that asks the surety to stretch. Protecting working capital, rather than draining it to mobilize, is one of the most reliable ways to keep a rate down.
Budgeting bonding into a bid
Price it as a line item
Carry bond premium as its own line in the bid rather than absorbing it into overhead. If the program applies, carry the SBA guarantee fee as a second line so the numbers stay transparent when the owner reviews your proposal.
Plan for the cash timing
Premium is generally due at bond issuance, before the first pay application clears. Bond premium is an eligible use of mobilization funding, which keeps working capital intact for payroll and materials.
For how each bond is priced and issued, see bid bonds, performance bonds, and payment bonds. Each page includes a bond cost calculator you can run against the contract you are pricing right now.
Cost questions
The premium is a percentage of the bond amount, and the rate depends on your financial strength, your experience, the size of the job, and the type of bond. See the bond cost page for how pricing works.
Underwriting reviews your contracting experience, company ownership, financial statements, and the largest jobs you have completed, along with the details of the specific project being bonded.
No. Requesting a bond or funding from CapStream does not affect your credit.
Get a real quote for the contract you are bidding
Requesting a bond or loan does not affect your credit.