Every public contractor understands that bonding capacity sets the ceiling on how much work one can take on. What fewer contractors understand is that retaining sitting idle on many of their current projects may be dragging down profit potential. With large sums of money locked away, they are not on your balance sheet as working capital. They are frozen assets, doing nothing to demonstrate the financial strength that sureties look for when they decide how much bonding to offer.
Using retaining substitution may completely change the picture. When this frozen cash is unlocked and can work for your business, it strengthens your liquidity and balance sheet, and a strong balance sheet is what expands bonding capacity. This may translate directly into bidding on large jobs, taking on more jobs at a time, and growing without waiting for the frozen retainage to eventually trickle back to you, while losing value to inflation.
This is one of the most overlooked levers in public construction, and it is precisely the kind of outcome Double Diamond has delivered for hundreds of contractors nationwide. If you want to understand how freeing your retainage could expand what you are able to bond and bid, call us at 877 420 2852, or click here to learn more.
