The Bonding Bottleneck No One Talks About
For many contractors, bonding is the lifeblood of growth. Without bonding capacity, even the best bid can’t move forward. Yet too often, contractors only discover problems with their bonding program after they’ve submitted a bid, acquired a company, transitioned ownership, made a big purchase, or lined up financing. By then, it’s too late.
The truth is simple: surety companies don’t just look at whether you can do the work, they look at whether you’re financially strong enough to survive the work. And if your financial picture raises red flags, it could delay, reduce, or even eliminate your ability to secure a bond.
That’s where The McConkey Surety Health Check comes in.
What Is a Surety Health Check?
Think of it as a financial “pre-bid inspection.” Just like you wouldn’t roll equipment onto a job site without making sure it’s ready to perform, you shouldn’t head into bidding season without understanding how your business looks through the eyes of a surety underwriter.
The McConkey Surety Health Check provides:
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An independent review of your financials and ratios from a surety perspective. Surety companies make adjustments to your financials. What your CPA presents is not exactly what your financial picture looks like from your surety’s perspective. It is key to understand what the surety may not count in their analysis, and how this could affect your surety program.
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Identification of risks (working capital, leverage, cash flow, debt structure).
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Corrective strategies to strengthen your balance sheet, reporting, and presentation.
Why It Matters for Contractors of All Sizes
For Small and Mid-Sized Contractors:
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Unlock bigger projects: Improve your bonding line so you can bid on the next level of contracts.
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Avoid surprises: Catch issues before the surety does, preventing delays or denials.
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Strengthen banking relationships: Better ratios and reporting make you more attractive to lenders.
For Established, Larger Construction Companies:
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Maximize bonding capacity: Ensure you can take on multiple large projects without surpassing your program limits.
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Improve surety terms: Stronger financial presentation can lead to lower rates, more favorable indemnity structures, or more flexibility when onerous conditions present themselves on projects that you would like to take on.
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Support long-term planning: Whether you’re exploring ownership transition, succession, or acquisitions, your surety program will be scrutinized. Our health check prepares you for those conversations.
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Enhance credibility with partners: Banks, joint venture partners, and project owners all gain confidence when they see you’ve proactively managed your surety profile.
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Assess your capitalization: If you’re considering increased bonuses for key employees, taking distributions for personal ventures, or making larger purchases to position your company for the next level, a Surety Health Check can show you how those decisions may impact your bonding program — and help you plan accordingly.
The Most Common Surety Red Flags
Even successful contractors can run into issues that hurt bonding capacity. The McConkey Surety Health Check identifies and addresses these risks:
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Overreliance on short-term debt: Too many contractors lean on lines of credit instead of retained earnings.
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Weak working capital ratios: Sureties want to see strong liquidity to handle unexpected project demands.
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Unreliable financial statements: Outdated, incomplete, or poorly prepared reports erode confidence.
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Profit fade: Declining gross margins from backlog to completion raise questions about project management.
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Rapid growth without capital: Growing faster than your balance sheet can support can make sureties hesitate to support your growth goals, long-term plans, increased bid activity or increased bonding program needs.
The Payoff: From Bottleneck to Growth Engine
Contractors who go through The McConkey Surety Health Check often find they:
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Win more bids by increasing their capacity and credibility.
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Negotiate better surety and bank terms by proactively strengthening financial ratios.
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Gain clarity on their true financial standing, which helps with both daily operations and long-term planning.
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Avoid last-minute surprises that can derail opportunities.
For larger firms, the payoff often comes in the form of program stability, making sure you can pursue opportunities confidently, even as market conditions or ownership structures change.
Don’t Wait Until It’s Too Late
Surety issues rarely show up when things are calm, they show up when you need them least: right before a critical bid, a major expansion, or a financial transaction. By taking a proactive approach, you shift from reacting to roadblocks to creating a clear path forward.
The McConkey Surety Health Check is a necessity if you want to grow, compete, and protect your business.
If you are interested in learning more about The McConkey Surety Health Check, please use the link below to set up your consultation or to obtain further information.
Email Crystal Bennis, AFSB
