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Contractors' Checklist: Bondability Issues
 This checklist provides contractors with information about the items bonding companies consider when reviewing bond requests.
It is important, however, that the items listed on the checklist be considered as a whole – a company may be weak in one area and strong in another.
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Annual Financial Statement
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Desirable for Bonding
• Audited by independent CPA
Acceptable for Bonding
• Reviewed by independent CPA
Inhibits Bonding
• Compiled statements by independent CPA
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Stockholder's Equity
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Desirable for Bonding
• The percent of work on hand
Acceptable for Bonding
• Seven to ten percent of work on hand
Inhibits Bonding
• Less than seven percent of work on hand
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Job Borrow
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Desirable for Bonding
• Overbilling does not have job borrow component
Acceptable for Bonding
• Minimal job borrow in place
Inhibits Bonding
• Job borrow equals or exceeds liquid assets
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Accounting Method
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Desirable for Bonding
• Percentage of completion
Acceptable for Bonding
• Percentage of completion
Inhibits Bonding
• Other than percentage of completion
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Accounts Receivable
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Desirable for Bonding
• Less than 45-day sales volume in accounts receivable
Acceptable for Bonding
• 40-90 days of current sales volume in accounts receivable
Inhibits Bonding
• More than 90 days of sales volume in accounts receivalbe
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Accounts Payable
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Desirable for Bonding
• Invoices paid in 30 days
Acceptable for Bonding
• Invoices paid within 60 days
Inhibits Bonding
• Invoices delinquent past 60 days
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Construction Technology Required by the Job
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Desirable for Bonding
• Contractor has shown consistent ability to perform type of construction and skills in a significant portion of jobs
Acceptable for Bonding
• Contractor has past successful experience with required construction and technology
Inhibits Bonding
• Contractor has no experience with type of construction
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