What Sureties Look For When Bonding Newer Construction Companies

New construction companies face a special set of hurdles when beginning, as any business does. It’s not just getting set up that causes barriers, but it’s getting the bonding in place to allow you to pursue the projects that will help your business grow. This means getting the right bond program can be critical to early success.

To help navigate what sureties look for when bonding newer construction companies, we’ve assembled the typical hurdles you’ll face and then provided guidance to help you overcome them to get the surety bonds you need to take the next step in growing your construction company.

What Surety Bond Agencies Look For in Newer Construction Companies

All surety bond agencies look for similar things for bonding, whether a new construction company or one that has been in business for a long time. As a newer contractor, the key is finding ways to satisfy these requirements even though you haven’t been in business long. 

Here are the top things surety agencies will look for when bonding a newer construction company:

  • Past Experience: This can be difficult for new construction companies that have been in business a year or two, because you’ve probably only completed a limited number of jobs. What you can do is use your personal resume to beef this up. While your business may not have been around for very long, you have tremendous experience prior to starting your business. Key areas to address for the surety company are: 1) What role did you play at your prior employer? 2) What management skills did you develop? 3) What relationships do you have with key personnel such as estimators, project managers, or field labor that can help you build your team?  
  • Projects Completed or Performed: Ties into the previous point, but here the California surety bond  agency is looking more at the specific projects you’ve completed in your career. Providing a list of jobs including the owner names, description, and dollar sizes can help provide the surety with insight into your true capabilities. 
  • Capital: Like a lot of aspects of business, money counts. The surety wants to ensure you can successfully cash flow your operation while working on a particular project, that you have the ability to get the equipment needed, and pay subcontractors. The three points below are things a surety agency will look for when it comes to your finances. 

    • Do you have good personal credit? 
    • How much capital do you have in the company and personally?
    • Do you have a line of credit for the business or a home equity line?

If you see that list and become discouraged to pursue surety bonds, don’t be. While many California surety bond agencies won’t work with new construction companies and may often tell you that you’re not able to get a bond, it’s important to get a second opinion. 

Getting a surety bond is too important to the growth of your business to leave it one agency saying “No”.

Working with the Right Surety Bond Agency in California

Not all California surety bond agencies are created equal. Some will tell you that newer contractors cannot get bonds until a certain amount of time in business has passed or tell you that without a business line of credit you’ll never get bonded. As said earlier, that’s why it’s important to ask around. 

Working with the right surety agency doesn’t only help you get the bonds you need to grow your business, it means you’ll get the guidance and support your company would benefit immensely from. For example,  if you haven’t been able to get a line of credit, what about trying for an SBA loan that newer businesses can get after just a couple of years? In the meantime, perhaps you can get a home equity line of credit on your residence. 

What type of accounting software should you use? Is something like QuickBooks sufficient or should you start out with a more advanced software given your business plan? 

It’s those kinds of questions good surety agencies would help you answer, the sort that works with new construction companies regularly. That’s where you should begin your hunt for a California surety bond agency. 

You’ll want to find out whether the agent has access to the Small Business Administration (SBA) Bond Program. The SBA program was created by the federal government in an effort to increase the small business participation in federal, state, and local government contracting. To accomplish this, the SBA provides participating surety companies a guarantee for the bid, performance, and payment bonds they write to contractors enrolled in the program. This allows the surety companies to be more liberal in their underwriting than they would typically be. At CSBA, we have decades of experience using the SBA program to aid smaller, growing contractors.

Finally, asking the agent for references of newer contractors they’ve helped is also key, because getting a first hand account from contractors that have been in your shoes will really tell you whether the surety agency has the experience and resources you need.

This leads to the next point…

CSBA Helps New Construction Companies

Commercial Surety Bond Agency is one of the few California surety agencies that specifically focuses on helping new construction companies grow their business. After all, you’re the future of building up our golden state. 

One of the best advantages in partnering with CSBA, beyond the extensive experience we have helping newer construction companies, is the time we take getting to know your business and your plans for the future. We want to understand any hurdles you may have, help develop a strategy to overcome them and guide you to growth. We take a look at your accounting and company organization, offering guidance when needed. We talk about strategy for buying the equipment you need vs. renting to limit any impact on bonding, and we make sure to provide you resources to other professionals advisors in the accounting, banking and legal arenas, so you have the right team to help you succeed.  

These are all important points to tackle when seeking a bond and we approach them seriously as a coach would the championship game. That’s what we do at CSBA, champion and coach new construction companies to grow far beyond what they thought was possible at the beginning. Take a look at what other new construction companies have said about having CSBA as their ally:


Don’t let other surety bond California agencies dupe you into thinking you’re not ready for the next step just because you’re a new construction company. Partnering with us means we help make you ready for the next step and every step beyond. At CSBA, we don’t only help prepare you to get the surety bond you need for a project, we help you gain the knowledge to grow into the successful construction company that you want to be. 

We invite you to explore the CSBA Difference and why contractors both new and established of varying sizes have partnered with us for over 35 years. We don’t turn away the fresh face, we invest in it and provide the literacy necessary to achieve.

Arturo Ayala.
About The Author

Arturo Ayala

Senior Underwriter

Contact Commercial Surety

We want to know more about how we can help your construction company get the right contractor bond for your next project. Fill out the form below and one of our local expert bonding agents will be in touch with you shortly.

Thanks for contacting CSBA!

Scroll to Top