Performance bonds
A performance bond guarantees the project owner that the work will be completed according to the terms of the contract. It is the bond that unlocks most public and larger private projects.
Requesting a bond does not affect your credit.
Bond cost calculator
Estimate a bonding budget for the contract you are pricing. Every result is shown as a range, never a single figure.
Enter your contract price to see an estimated bonding range for performance bonds.
For planning only. This is not a quote. Your final premium depends on underwriting.
How a performance bond works
The bond is written for the full contract price in most cases. If the contractor defaults and cannot cure, the owner makes a claim and the surety can finance the contractor, arrange a completion contractor, or pay damages up to the bond amount.
A performance bond is not insurance. The surety expects to be reimbursed for any loss it pays, which is why underwriting looks closely at your working capital, backlog, and completed job history before approving capacity.
Bond amount
Usually 100% of the contract price, as required by the contract documents.
Premium
A percentage of the contract price, driven by your financial strength and the bond size.
Turnaround
As fast as same day after award once you and your bonding line are approved. Turnaround depends on complete information and underwriting review.
What you will need
- The executed or proposed contract and the bond forms the owner requires
- Company financial statements and a current work in progress schedule
- Completed job history showing similar scope and contract size
- Bank information and credit history for the owners of the business
Contractors who fall short of a traditional surety's requirements can often still be bonded through the SBA Surety Bond Guarantee Program.
Performance and payment bonds usually travel together
Most owners require both. The performance bond protects the owner's completion interest and the payment bond protects your subcontractors and suppliers. Both are written against your bonding line, and you can estimate the combined premium on the bond cost page.
Performance bond FAQ
Performance bond questions, answered
No. Performance and payment bonds are issued together on almost every bonded job, and one premium covers both. You do not pay a separate premium for the payment bond.
The premium is a percentage of the contract price, typically 2 to 3 percent. Your rate depends on your financials, your contracting history, and the size of the job. If the job also requires a payment bond, the same premium covers both.
Federal construction contracts over $150,000 require a performance bond under the Miller Act. Most states have similar laws for state and local public projects. Many private owners and general contractors also require one in the contract.
The owner makes a claim, and the surety can finance the contractor, arrange a completion contractor, or pay damages up to the bond amount. A performance bond is not insurance, so the surety expects to be reimbursed for any loss it pays.
Apply once and CapStream sets up your bonding line. From there you pull bid, performance, and payment bonds project by project, from $5,000 up to $10 million, with mobilization funding available for upfront project costs. Start with the eligibility check.
Get approved for the performance bond capacity your next award needs
Requesting a bond or loan does not affect your credit.