{
  "slug": "bonding-capacity",
  "title": "Bonding Capacity Calculator",
  "heading": "Contractor Bonding Capacity Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/bonding-capacity",
  "summary": "Estimate single-job and aggregate bonding limits from working capital.",
  "description": "Sureties size bonding capacity primarily off working capital (current assets minus current liabilities) and net worth, applying a multiplier that reflects your track record, financial statement quality, and industry norms. A common rule of thumb is single-job capacity of roughly 10-15x working capital and aggregate program capacity of 15-20x working capital, though quality sureties will flex these multipliers up for contractors with strong CPA-reviewed or audited financials, low claims history, and experienced management, and flex them down for contractors with weak financial reporting or thin equity. This calculator applies conservative default multipliers to your working capital and net worth to give you a ballpark bonding capacity range before you sit down with your surety agent, so you know roughly what size single job and total backlog you can chase before you go shopping for a program increase.",
  "formula": "Single-job capacity ≈ Working capital × Single-job multiplier. Aggregate capacity ≈ Working capital × Aggregate multiplier.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=bonding-capacity",
  "inputs": [
    {
      "id": "currentAssets",
      "label": "Current assets",
      "kind": "number",
      "hint": null,
      "default": 1200000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "currentLiabilities",
      "label": "Current liabilities",
      "kind": "number",
      "hint": null,
      "default": 500000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "netWorth",
      "label": "Net worth",
      "kind": "number",
      "hint": null,
      "default": 900000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "singleMult",
      "label": "Single-job multiplier",
      "kind": "number",
      "hint": null,
      "default": 12,
      "unit": null,
      "min": 5,
      "max": 20
    },
    {
      "id": "aggMult",
      "label": "Aggregate multiplier",
      "kind": "number",
      "hint": null,
      "default": 18,
      "unit": null,
      "min": 5,
      "max": 30
    }
  ],
  "outputs": [
    {
      "id": "aggregate",
      "label": "Estimated aggregate program capacity",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "single",
      "label": "Estimated single-job limit",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "workingCapital",
      "label": "Working capital",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "wcToNetWorth",
      "label": "Working capital as % of net worth",
      "format": "percent",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Current assets: 1200000 $",
      "Current liabilities: 500000 $",
      "Net worth: 900000 $",
      "Single-job multiplier: 12",
      "Aggregate multiplier: 18"
    ],
    "outputs": [
      "Estimated aggregate program capacity: $12,600,000.00",
      "Estimated single-job limit: $8,400,000.00",
      "Working capital: $700,000.00",
      "Working capital as % of net worth: 78%"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter current assets ($).",
      "Enter current liabilities ($).",
      "Enter net worth ($).",
      "Enter single-job multiplier.",
      "Enter aggregate multiplier.",
      "Read your estimated aggregate program capacity on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "currentAssets": 720000,
        "currentLiabilities": 300000,
        "netWorth": 540000,
        "singleMult": 7,
        "aggMult": 11
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "currentAssets": 1200000,
        "currentLiabilities": 500000,
        "netWorth": 900000,
        "singleMult": 12,
        "aggMult": 18
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "currentAssets": 1920000,
        "currentLiabilities": 800000,
        "netWorth": 1440000,
        "singleMult": 19,
        "aggMult": 29
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Why do sureties multiply working capital rather than revenue?",
      "a": "Revenue tells you how much work you're doing, not how much cash cushion you have if a job goes sideways with cost overruns or slow-paying owners. Working capital is the buffer that absorbs a bad job without the surety having to step in and finish the contract, which is why it's the primary sizing metric even for contractors with strong top-line revenue."
    },
    {
      "q": "What multiplier should I actually expect from my surety?",
      "a": "New or thinly capitalized contractors often see single-job multipliers closer to 8-10x and aggregate around 10-15x; established contractors with 5+ years of profitable audited statements and clean claims history can see 15-20x single and 20x+ aggregate. The multiplier is a relationship number, not a formula — your surety agent negotiates it based on the full underwriting file, not just the balance sheet."
    },
    {
      "q": "Does backlog eat into my bonding capacity even before a job is bonded?",
      "a": "Yes — aggregate capacity is your total outstanding bonded work, not just new bids. If you already have $8M in bonded backlog and your aggregate limit is $12M, you only have $4M of headroom for new bonded work regardless of how strong your balance sheet looks on paper today."
    },
    {
      "q": "How fast can bonding capacity change year to year?",
      "a": "It moves with your financial statements, typically reassessed annually at renewal. A profitable year that grows retained earnings and working capital can meaningfully increase capacity; a loss year, a large uncollected receivable, or a claim against your bond can shrink it sharply, sometimes forcing a contractor to turn down work mid-year."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/retainage-cash-flow",
    "https://www.revenuelab.fyi/toolbox/bid-bond-premium",
    "https://www.revenuelab.fyi/toolbox/contingency-reserve-percentage"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Bonding Capacity Calculator (https://www.revenuelab.fyi/toolbox/bonding-capacity)"
}