What is a Letter of Bondability?

A letter of bondability is a pre-approval for an aggregate dollar amount of construction bonds.

This is also referred to as construction bond capacity or more formally, getting setup with a construction bond program.

It's not really a letter, but a document that proves your company has access to a total dollar figure that can be used for construction project surety bonds.

For example, if you get approved for $500,000 of construction bond capacity you're company can:

• Take on one single project valued at $500,000
• Take on multiple projects as long as the outstanding total does not go over $500,000

However, just because you're approved for these dollar amounts, it does not mean you have immediate access to the bid bond, performance bond, and payment bond you need.

The surety that approved your company will need to first look at the project and approve the project.

They typically looks for things like:

• What is the bid spread?
• How long is the estimated project timeline?
• Does the project have any environmental remediation exposure?
• How far is the project from your home office?

Factors like these can cause the surety to deny the project. But from the moment you get approved for your aggregate amount, you will not have credit be an issue until you choose to increase your aggregate amount.

We can help you get approved for up to $3 million dollars in aggregate construction bond capacity with nothing more than a credit check of business ownership.

So when you're ready, click here and tell us about your business. You can also call a bond specialist at 1-800-608-9950 if you prefer to speak with a real person.