How to Get a Bid Bond: A Step-by-Step Guide for Contractors

Bid bonds are often free, but getting one isn’t automatic — the surety is effectively pre-approving you for the entire project’s bonding. This guide walks through exactly what you need, how the underwriting works, and how to qualify quickly, including with credit challenges.

If you’re new to contract bonds, start with bid vs. performance bond.

What You Need Before Applying

Sureties evaluate bid bonds based on your ability to complete the project if you win. Gather these in advance:

• Bid bond amount: the percentage required by the project owner, usually 5–20% of your bid (10% is common).
• Project details: scope, contract value, completion timeline, and owner name. Usually all this information is available in the bid package provided by the Obligee/owner of the project.
• Largest completed project to date: this detail helps the surety company assess your experience and capability in managing projects of a similar scale.
• Business financials: balance sheet and profit and loss statement; personal financial statement for the owners; CPA-reviewed or audited statements for larger contracts.
• Work-in-progress (WIP) schedule: current jobs, percent complete, and remaining costs — the single most important document required for underwriting larger contract bonds.
• Personal financial statement: for the business owners who’ll sign indemnity.

The 5-Step Process

Step 1: Confirm the requirement

Read the bid solicitation carefully. It states the bid bond amount (or percentage), the required form, and the deadline. Public projects almost always require a bid bond; private projects sometimes accept a cashier’s check or bid deposit instead.

Step 2: Apply with Bonds Express

Apply with a bonding agent like Bonds Express, a company that has experience in bid and performance bonds and contract surety. BondsExpress contract bond programs cover projects of every size.

Step 3: Submit financials and WIP

For larger scale projects, the surety reviews your financials, work-in-progress, experience, and credit to establish your bonding capacity — the maximum single project and aggregate work they’ll bond. This is the real underwriting step. For smaller projects (up to 1 million), financial statements and WIP may not be required.

Step 4: Get approved for a bonding line

Once approved, you have a bonding line you can draw against for bids. For small bonds, sureties may approve a single bid bond without a full bonding line.

Step 5: Receive your bid bond

The surety issues the bid bond — usually at no charge — for you to submit with your bid. You only pay a premium when you win and the performance/payment bonds are issued.

How Much Does a Bid Bond Cost?

Bid bonds are typically free. You pay only when the project is awarded and the performance bond is issued. At that point, the combined performance/payment premium runs 3% of the contract for qualified contractors (3–10% for hard-to-place).

For full pricing, see the surety bond cost guide and payment vs. performance bond.

Getting a Bid Bond with Bad Credit

Bid bonds are very difficult to secure if the owner has bad credit. If you don’t qualify for the bid bond due to credit, you can always bid with a check. See can I get a bid bond with bad credit? and the bad credit contractor program.

Tips to Get Approved Faster

• Prepare a clean WIP schedule. Controlled, profitable jobs are the most persuasive evidence of capacity.
• Get CPA financials. Reviewed or audited statements unlock larger bonding lines.
• Build a track record. Start with smaller bonded jobs to establish history and grow your capacity.
• Show liquidity. Cash and an available line of credit reassure underwriters more than almost anything.

Frequently Asked Questions

• How do I get a bid bond?
  Confirm the required bid bond amount (usually 5–20% of your bid) and obtain the bid package/project manual, apply with a bonding agent like Bonds Express, submit business financials and a work-in-progress schedule, get approved for a bonding line, and receive your bid bond — usually free. The surety qualifies you for the performance bond behind it during this process.
• How much does a bid bond cost?
  Bid bonds are usually free. You pay only when you win the project and the performance/payment bonds are issued, at which point the combined premium runs about 3% of the contract value for qualified contractors, or 3–10% for hard-to-place contractors.
• What do I need to get a bid bond?
  The required bid bond amount, project details, business financial statements, a work-in-progress schedule, and a personal financial statement for the owners signing indemnity. Larger contracts may require CPA-reviewed or audited financials.
• How long does it take to get a bid bond?
  If you already have an established bonding line, a bid bond can be issued same-day. First-time applicants need time for the surety to review the application, financials and set up a bonding line — typically a few business days. Apply before you bid, not after.
• Do I need a bid bond for every project?
  Only when the project owner requires one, which is standard on public projects and common on larger private ones. Some private owners accept a bid deposit or cashier’s check instead of a bid bond.
• What happens if I win the bid?
  You sign the contract and provide the performance and payment bonds. The bid bond’s role ends once those are in place. If you can’t provide them or back out, the owner can claim against your bid bond for the difference between your bid and the next-lowest bid.
• Is a bid bond the same as a bid deposit?
  No. A bid bond is a surety bond guaranteeing you’ll honor your bid, usually issued free. A bid deposit (or bid bond in cash) is actual money submitted with the bid. Owners often accept either, but a surety bid bond doesn’t tie up your cash.

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