How to Transition from Small Bonds to Large Projects

paper reading "Surety Bond"

Every contractor starts somewhere—often with small jobs and modest bond requirements. But as your business grows, so do the opportunities, including your bonding capacity (meaning the amount of surety credit a surety company will provide to a contractor). 

Transitioning from small bonds to large projects (and larger bonds) is a major milestone, and it requires more than just ambition. You need a strategic approach to bonding, financial readiness, and strong relationships with your surety.

To help with this transition, review our practical guide to help you scale your bonding capacity and confidently pursue larger, more complex projects.

Why the Transition From Small Surety Bonds to Projects with Higher Bond Amounts Matters

Moving to surety bonds for large construction projects can unlock:

  • Higher revenue potential
  • Long-term contracts
  • Government and public sector work
  • Stronger industry reputation

But it also brings increased scrutiny, stricter underwriting, and greater risk. Planning ahead helps you avoid setbacks and position your business for sustainable growth.

5 Tips for Transition to Large Projects With Larger Bond Amounts

If you’re ready to take advantage of the benefits of receiving bonding for large projects while reducing your risk, you’ll need to scale your bonding capacity. With a higher bonding capacity, your company is far more likely to receive larger surety bonds for construction projects. 

Review our five primary tips for successfully applying for surety bonds, increasing your bond capacity, transitioning to larger projects, and improving your relationship with surety companies:

1. Strengthen Your Financial Foundation

Sureties evaluate your financial health before approving larger bonds. To prepare:

  • Maintain clean, professionally prepared financial statements: Clean, CPA-prepared financials give surety underwriters a clear view of working capital, equity, cash flow, and profitability. Additionally, larger bonds often require CPA-reviewed or audited statements for multiple years, making professionally prepared financial statements a must.
  • Track job costs and profitability accurately: Detailed, accurate work-in-progress(WIP)/job-cost reporting shows backlog health, billing practices, and profit trends, helping underwriters assess whether you can manage bigger projects without profit fade or cash-flow strain.
  • Build working capital and cash reserves: Working capital and net worth are primary drivers of bonding capacity, and sureties often benchmark capacity as a multiple (commonly ~10–20×) of adjusted working capital. Stronger cash cushions can also sustain overruns or delays without jeopardizing completion. In volatile periods, sureties tighten these multiples, making liquidity even more critical.
  • Limit debt and improve your credit score: Underwriters scrutinize leverage and credit (including personal credit scores) as part of the “capital” picture when issuing bonds. Lower debt and stronger credit histories generally reduce perceived risk, support higher limits, and can lower premiums.

Key Takeaway: Consider working with a construction CPA to ensure your books meet surety standards. Strong financials are the foundation of higher bonding capacity.

2. Build a Proven Track Record

Sureties want to see that you can handle larger jobs before they issue bigger bonds. Start by:

  • Completing mid-sized projects successfully: Sureties want evidence that you’ve finished work of similar size and scope. Begin to build that track record by targeting jobs around two times your largest completed project. A history of on-time, on-budget project delivery materially improves approval odds for bigger construction bonds.
  • Documenting your performance and compliance: Keep thorough WIP schedules and a current project history, as underwriters rely on these to confirm backlog health, profitability, and whether you’re managing jobs without profit fade. Standard submission checklists also call for items like Certificates of Insurance and references that substantiate compliant operations.
  • Avoiding claims and disputes: Claims history is a red flag that can shrink capacity or trigger tougher terms, so proactive risk management and safety practices directly protect your ability to receive a larger bond. When claims do arise, sureties must investigate, and today’s environment has many markets tightening standards amid rising claim activity. 
  • Gathering references from satisfied clients: Owner and supplier references provide third-party validation of quality and reliability and are commonly requested in bond submissions. Strong references, paired with resumes of past projects, help underwriters connect your experience to the larger work you’re pursuing.

ProSure Group’s Key Takeaway: A solid track record shows you’re ready for the next level and gives your bond agent confidence to advocate on your behalf.

3. Communicate with Your Bond Agent Early

Don’t wait until you’re bidding for a large job to talk to your bond agent. Instead:

  • Discuss your growth goals: Laying out the sizes, scopes, and timelines of the projects you want next helps your bond producer target the right construction bond types and surety markets, while mentoring you on what it will take to qualify.
  • Review your current bonding limits: Surety bond programs are governed by a single-job limit and an aggregate limit, which together determine how large you can bid and how much backlog you can carry. Reviewing these thresholds with your agent ensures you pursue opportunities that fit your current capacity while planning safe increases.
  • Identify gaps or areas for improvement: An agent can spot underwriting red flags—like thin working capital, inconsistent WIP/job-cost reporting, over/under-billings, or scope gaps—that can stall bigger bonds. Tightening WIP accuracy and resolving scope or buyout gaps are common fixes that strengthen submissions.
  • Create a roadmap for increasing capacity: Together you can plot incremental step-ups in project size, set milestones for periodic financial reporting, and prioritize actions like retaining profits or reducing leverage to lift limits.

Key Takeaway: Your bond agent can help you prepare for underwriting, recommend financial strategies, and guide you through the transition, so make sure to prioritize communications with them.

4. Understand the Underwriting Process

Larger bonds come with more rigorous underwriting. Be ready to provide:

  • Detailed financial statements: For bigger bonds, sureties typically want GAAP, construction-specific statements (often CPA-reviewed or audited) so they can evaluate working capital, net worth, profitability trends, and disclosures tied to percentage-of-completion accounting. Many underwriters ask for multiple years plus current interims as bond sizes increase.
  • Work-in-progress schedules: A current WIP shows each job’s contract value, costs to date, billings, estimated cost to complete, and projected gross profit, which lets underwriters spot over/under-billings and profit fade before approval.
  • Business plans and projections: Underwriters look for a written plan that explains target project sizes, markets, staffing, and a cash-flow forecast, demonstrating you can scale safely without stressing liquidity.
  • Resumes and experience of key personnel: Resumes for owners and key field/PM staff help sureties verify that your team has successfully delivered work of similar scope and can manage bigger projects.

ProSure Group’s Key Takeaway: Transparency and preparation go a long way. The more organized you are, the smoother the approval process will be.

5. Improve Internal Systems and Controls

As projects grow, so do the demands on your business. Make sure you have:

  • Reliable project management systems: As jobs grow, sureties want disciplined cost controls and current WIP reporting captured in your project management and accounting systems, because timely in-progress data helps prevent profit fade and flags billing or schedule risks early. Strong internal controls and construction-specific WIP schedules are standard underwriting expectations for larger bonds.
  • Clear contract review procedures: Bigger contracts carry tighter terms on scope, change orders, notices, damages, and payment. A formal pre-bid/ pre-signing review reduces the chance you accept onerous clauses that strain cash flow or expand risk beyond your capacity—exactly the pitfalls surety advisors warn contractors to avoid.
  • Strong subcontractor vetting and payment processes: Underwriters want to see that you prequalify subcontractors for safety, financial strength, and relevant experience, since weak subcontractors are a common source of delays, claims, and cost overruns. Standardizing COI collection, endorsements, and pay-if-paid/lien-waiver workflows helps contain downstream risk and supports surety confidence.
  • Compliance tracking and documentation: Since lapses can trigger fines, shutdowns, and bond trouble, larger bond programs expect evidence that you can document and monitor regulatory compliance across jobsites. This evidence often includes safety programs, training logs, inspections, and required records. Maintaining organized compliance files streamlines inspections and demonstrates effective controls.

Key Takeaway: These systems and procedures help you manage risk, avoid claims, and demonstrate professionalism to both clients and sureties.

Need Surety Bonds for Large Projects? Turn to ProSure Group

At ProSure Group, we specialize in helping contractors transition from small bonds to large projects. Whether you're preparing for your first seven-figure job or scaling up your bonding program, we’ll guide you every step of the way with expert advice and tailored solutions.

📞 Call us at (800) 480-3883

 🌐 Visit us at www.prosuregroup.com

 📩 Or email us at Contractbonds@prosuregroup.com to request a consultation