How to Increase Bonding Capacity in Ontario: The Financial Moves That Unlock Bigger Projects
For many contractors, bonding capacity is the ceiling on growth. You can have demand, relationships, and technical skill, but if your bond limits are too low, you cannot bid the next tier of work.
In Ontario and across Canada, sureties underwrite bonding like credit. That means your financial position and your controls matter as much as your trade capability.
This article explains what bonding capacity is, what drives it, and practical steps you can take to increase limits.
What bonding capacity means
Bonding capacity generally refers to:
Single job limit The maximum bond size you can obtain for one project.
Aggregate limit The total bonded backlog your surety is willing to support at one time.
You can win work quickly and still fail to grow if your aggregate is too tight.
The biggest drivers of bonding capacity
• Working capital and liquidity • Net worth and retained earnings • Profit history and margin stability • Cash flow management and collections discipline • Backlog quality and concentration • Project controls, including change orders and cost tracking • Experience delivering similar size projects
Practical ways to increase bond limits
Improve working capital without guessing Sureties look at current assets versus current liabilities. If your working capital is thin, your bond limits will be too.
Common levers include:
• Tightening receivables and billing timing • Reducing owner draws that strain liquidity • Improving job cost tracking to prevent margin surprises • Negotiating better payment terms where possible
Build retained earnings Consistent profitability that stays in the business increases net worth and bond confidence.
Present backlog clearly A simple work in progress schedule and backlog list with percent complete, estimated margin, and billing status reduces underwriting uncertainty.
Reduce concentration risk If one job makes up most of your backlog, sureties view you as fragile. Diversification helps.
What to prepare for a bonding increase request
• Year end financial statements • Interim statements if year end is older • Backlog and work in progress schedules • List of completed comparable projects • Banking summary including credit facilities • Organization chart and key personnel overview
FAQ
Can a newer company get meaningful bonding in Ontario Yes, but it depends on financial strength, owner experience, and project profile.
Does stronger insurance help bonding It can. Owners often require both, and a clean insurance program reduces friction and improves project readiness.
How often should I review bonding limits At least annually, and any time you plan to bid larger work.
Bond Limit Increase Plan
If you want to bid larger projects in Ontario or expand across Canada, we can map the fastest path to higher bond limits. Send your last financial statements and your current backlog. We will propose a bond capacity target and the steps to reach it.