The maximum total project value that a surety will bond for a contractor at any given time.
Bonding capacity is the maximum total value of projects for which a surety company will provide performance and payment bonds on behalf of a contractor at any one time. It is determined by the surety based on the contractor's financial strength, working capital, backlog, experience, and character. Bonding capacity is often the binding constraint on a contractor's ability to pursue and win additional work.
The regional contractor's $40M bonding capacity limited them from bidding a $35M project that would have used nearly their entire line.
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