Sureties look at The Three C’s: Character, Capacity, and Capitol.
Character: Honesty, integrity and openness. When underwriting “Character”, sureties will look at the other two C’s to determine character and often refer to prior jobs and references.
Capacity: Ability to perform. Does the contractor have prior experience? A surety company will want to see that the contractor has done jobs in the same size, scope and location in the past.
Capitol: Financial ability. Does the contractor have the financial ability to perform this job? Do they have the working capitol to start this job? For traditional performance and payment bonds, contractors need enough to get them through about the first 30-60 days before they get their first draw from their obligee.