By: John S. Morlu II, CPA
Introduction: The Invisible Ceiling
For many SBA 8(a) contractors, the hardest part of growth isn’t finding opportunities—it’s getting the bonding capacity to pursue them.
You may have:
- A skilled team
- A strong backlog
- A record of on-time delivery
But if your financials aren’t independently reviewed or audited by a CPA, sureties hesitate to extend capacity. That hesitation quietly caps the size of the projects you can bid on.
Why Sureties Demand Verified Numbers
A bonding company’s job is to guarantee that you can perform and pay subcontractors and suppliers even if things go wrong. They don’t just look at revenue; they look at:
- Net worth and working capital
- Job-cost reporting discipline
- Historical profitability
- Cash-flow predictability
All of that depends on credible, GAAP-compliant financial statements. When the numbers come straight from an internal bookkeeper—or aren’t supported by a CPA’s independent review—sureties see higher risk, and they respond by:
- Capping bonding limits
- Demanding more collateral
- Delaying approvals
The Growth Trap
This creates a vicious cycle for contractors:
- You can only bid on smaller projects because of limited bonding.
- Without bigger contracts, your working capital grows slowly.
- Without stronger financials, sureties won’t raise your bonding limit.
The bottleneck isn’t your capability—it’s confidence in your numbers.
The CPA Seal of Credibility
A CPA-reviewed or audited statement tells the bonding agent:
- Your revenue is recognized properly—not just cash in and out.
- Your receivables are collectible.
- Your costs are tracked accurately by project.
- Your balance sheet reflects real assets and obligations.
This assurance reduces the surety’s perceived risk and often leads to:
- Higher single-project and aggregate bonding limits
- Lower collateral requirements
- Faster approvals for mid-year capacity increases
Case Snapshot: Breaking the Ceiling
A $9 million-revenue 8(a) construction contractor was stuck at a $2 million single-job bonding limit. The owner assumed it was because the company needed more capital. In reality, the surety simply didn’t trust the bookkeeper-prepared statements.
When JS Morlu provided a GAAP-compliant, CPA-reviewed report and cleaned up contract-cost allocations:
- The surety raised the single-job limit to $4.5 million within 60 days.
- The firm successfully bid—and won—its largest project to date.
- No new capital was required; just better-trusted numbers.
The Cost of Waiting
Every month you spend capped at a low bonding limit is a month you miss out on:
- Larger, more profitable bids
- Longer-term task orders
- Teaming opportunities with primes that need strong bonding partners
Worse, if your financials need a major cleanup at the last minute, you’ll face:
- Rush-review fees
- Project-award delays
- Frustration from sureties and lenders
How JS Morlu Helps You Unlock Capacity
We specialize in helping 8(a) contractors turn financial reporting into a growth enabler:
- Early readiness assessments to spot system gaps before they block bonding
- Quarterly or mid-year check-ins so books stay review-ready
- Direct communication with sureties and agents to answer their questions fast
- Reports that meet SBA, lender, and surety standards—reducing perceived risk
Owner’s Takeaway
If your bonding limit feels like a glass ceiling, the real problem may be trust in your numbers—not a lack of cash. For 8(a) contractors, a CPA can clarify whether the real constraint is working capital or credibility in the numbers.
Author: John S. Morlu II, CPA is the CEO and Chief Strategist of JS Morlu, leads a globally recognized public accounting and management consultancy firm. Under his visionary leadership, JS Morlu has become a pioneer in developing cutting-edge technologies across B2B, B2C, P2P, and B2G verticals. The firm’s groundbreaking innovations include AI-powered reconciliation software (ReckSoft.com), Uber for handymen (Fixaars.com) and advanced cloud accounting solutions (FinovatePro.com), setting new industry standards for efficiency, accuracy, and technological excellence.