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Built with Billd: How surety bonds can help contractors grow their business

Published: November 29, 2021
Last updated: April 19, 2022
Read time: < 1

In the construction industry, surety bonds are put in place to ensure a project is completed within the terms of the contract. On this episode of Built with Billd ,we sat down with Robert Kinder, Managing Director at Alliant Insurance Services, to talk about how contractors can use surety bonds to grow their business.

Surety bonds open up many different business opportunities for contractors because it allows them to bid on more state, federal, and municipal construction contracts. When General Contractors are reviewing bids for a particular job, subcontractors that are bonded are typically favored over those that aren’t. Surety bonds offer General Contractors an extra layer of verification that the subcontractor is going to complete the required work for the project.

Many factors go into the underwriting process for surety bonds, but the biggest things that insurance companies look for include:

  • Showing a strong balance sheet
  • Positive cash flow over time
  • Current availability of working capital
  • Past job performance
  • Current availability to bank lines of credit

“Underwriters like to see that a contractor has a strong balance sheet, is ideally cash heavy, and that they can bank lines of credit, however, underwriters don’t like to see contractors using their lines of credit – it’s sort of counterintuitive…they view lines of credit as an emergency source for funds.” – Robert Kinder, Managing Director, Alliant Insurance Services

About Billd: Billd stands alone as a partner that truly champions the subcontractor. Founders Christopher Doyle and Jesse Weissburg, industry veterans in both construction and finance, witnessed the detrimental impact to subcontractors of the longstanding broken payment cycle in construction. Their time in the trades inspired them to launch Billd in 2018, bringing the financial power of Wall Street to the construction job site. Billd's financial and payment products empower subcontractors to bypass project hurdles by providing access to upfront funds to cover their most pressing costs, including materials and labor. Unlike traditional financing outlets, Billd provides flexible lines of credit to accommodate the unpredictability of cash flow in construction, and extends their customers up to 120-day terms to align with industry payment standards. Billd knows traditional credit metrics are poor predictors for risk and has built a variety of industry-specific, proprietary analytic and financing tools to allow subcontractors to stabilize cash flow and more effectively grow their businesses.

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