Performance Bonds Without Personal Guarantee: The Inside Secret
20-year surety underwriter reveals when you actually need performance bonds, real pricing for $100k to $10M projects, and the inside secret to avoiding personal guarantees.
Performance bond cost calculator by project size.
Performance Bond Fundamentals
- • When performance bonds are actually required
- • Federal vs state vs private project requirements
- • Performance vs payment bond differences
- • Miller Act and Little Miller Act implications
Underwriting Secrets
- • Real pricing: $100k to $10M bond costs revealed
- • How to avoid personal guarantees
- • Underwriter evaluation criteria
- • Case study: $5M bond approval in 72 hours
Cold Open (0:00-0:30)
Contractor wins $5M project but nearly loses it due to performance bond misunderstanding
Underwriter Introduction (0:30-5:00)
Meet the senior underwriter who's approved billions in performance bonds
When Bonds Are Required (5:00-15:00)
Federal, state, and private project performance bond requirements breakdown
Real Pricing Revealed (15:00-30:00)
Actual performance bond costs for projects from $100,000 to $10 million
Personal Guarantee Avoidance (30:00-40:00)
The inside secret to avoid personal guarantees on performance bonds
Case Study: 72-Hour Approval (40:00-47:00)
Real example of $5M performance bond approved in 3 days
Excellent Credit (750+)
1-3%
of contract value annually
Good Credit (650-749)
3-6%
of contract value annually
Fair Credit (550-649)
6-15%
of contract value annually
Real Project Examples
$500,000 Municipal Project:
$5,000-$15,000 annual premium
$2,000,000 Commercial Building:
$20,000-$60,000 annual premium
$5,000,000 Infrastructure Project:
$50,000-$150,000 annual premium
$10,000,000 Federal Contract:
$100,000-$300,000 annual premium
Underwriter's Inside Tip
"Most contractors think personal guarantees are required for performance bonds over $1M. That's not true. Here's what actually determines if you need a personal guarantee:"
- • Working Capital: 10% of largest contract as liquid assets
- • Experience: 3+ similar projects completed successfully
- • Financial Strength: 2:1 current ratio minimum
- • Equity Position: 20% tangible net worth minimum
- • Surety Relationship: Multi-year track record preferred
Meet these criteria, and most sureties will waive the personal guarantee requirement.
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