Whether a contractor is bidding on projects, managing cash flow, or coordinating its trades, proper prior planning prevents poor performance. In fact, a contractor’s success depends a lot on preparation. The same principle applies to your bonding facility. Too often, contractors wait until they are in the middle of a large tender or facing tighter bonding limits before talking to their broker and starting to consider remarketing . If you are a contractor aspiring to take on larger projects in 2026, now is the time to ask your broker to start remarketing your bonding facility.
For years, Ferrari & Associates has advised contractors to remarket their bonding facilities proactively. Given the uncertainty and volatility in 2025, it has been a relative down year in new construction starts. However, we are seeing a kind of market correction, and now, more than ever before this year, we expect some change heading into 2026. As 2026 approaches, we anticipate it to be a year where many Canadian contractors will face shifting market conditions, evolving project demands, and stricter underwriting requirements. Here’s why reviewing your bonding limits, capacity, and surety relationship well in advance is essential.
What Is a Bonding Facility?
Let’s start by defining what a bonding facility is. A bonding facility is essentially your company’s line of credit with a surety. Instead of cash, the surety provides a guarantee to project owners that you will meet your contractual obligations. This facility typically includes a single job limit (the maximum bond size you can take on for one project) and an aggregate limit, which is the total bonding available for all your active projects.
Contractors who rely on bid bonds, performance bonds, or labour and material payment bonds must have a bonding facility in place before tender deadlines. Without sufficient capacity, you risk being shut out of bids or unable to take on larger projects. In short, bonding facilities are not a nice to have, they are a need to have.
Why Bonding Limits and Bonding Capacity Matter
As your business grows, so does the size and scope of your projects. The limits set in your bonding facility directly affect your ability to compete for new opportunities. Consider how increasing these limits can open doors to larger contracts, enhance your credibility with clients, and ultimately drive sustained business growth:
- Single Job Limit: If your facility only allows for $2 million jobs, you simply cannot pursue a $5 million tender—even if you have the team and experience to deliver.
- Aggregate Limit: This limit restricts the total bonded work on your books at one time. For example, a contractor with three bonded jobs running simultaneously may max out their aggregate limit and be unable to accept a fourth contract.
- Capacity: Surety companies assess your capacity based on your experience, financial strength, and project management ability. Expanding capacity requires strong financial statements, a proven track record, and strategic planning with your broker.
If your bonding limits don’t align with your business plan for 2026 and beyond, remarketing now gives you room to negotiate better terms and higher limits.
Why Remarketing Your Bonding Faciality Is Essential Before 2026
The Canadian construction and surety markets are shifting. Several factors make remarketing your bonding facility sooner rather than later a smart move:
- Economic Uncertainty
Rising interest rates, inflation, and supply chain costs have tightened profit margins. Sureties are responding with stricter underwriting. Waiting until 2026 could mean tougher requirements and higher scrutiny should current trends continue. - Upcoming Project Pipelines
Many municipalities and provinces have announced significant infrastructure investments for 2026 and beyond. Contractors who want to compete for these large projects need bonding facilities that match the scale of the opportunity. - Financial Positioning
Sureties evaluate three main areas, the three Cs: character, capacity, and capital. By remarketing in advance, you can present updated financial statements, demonstrate improved equity, and showcase your completed projects. This builds trust and increases your bonding ability. - Avoiding Last-Minute Pressure
Nothing derails a bid strategy faster than finding out your facility isn’t adequate days before tender closing. Remarketing your bonding facility early provides peace of mind and flexibility.
How Remarketing Your Bonding Facility Works
Remarketing your bonding facility doesn’t mean abandoning your current surety. It means ensuring your company is in the best possible position; whether with your existing provider or a new one. It’s like when your insurance broker shops around your business insurance versus just renewing the same policy with the same insurer. Here’s how the Ferrari & Associates Surety Team does it:
- Reviewing Your Current Facility
Our team will assess your single and aggregate limits, rate structure, and covenants.
- Preparing Financials
Strong year-end financial statements are critical. We always suggest that Contractors should work with their accountants to ensure statements highlight working capital and net worth, as these drive bonding capacity. - Building a Business Narrative
Sureties want to understand more than numbers. A clear business plan, succession planning, backlog details, and project history all strengthen your profile. We’ll help you tell your best story. - Engaging Multiple Markets
If your current surety cannot support your growth, we will market your account to other sureties. Competition often results in better terms. - Negotiating Terms
Our goal is a facility that reflects your 2026 growth targets: higher limits, more flexible underwriting, and strong support for future bids. We’ll work to make that happen.
Our Role in Remarketing Your Bonding Facility
With years of surety experience, we know that a proactive broker makes all the difference. Ferrari & Associates specializes in contract surety for Canadian contractors. Our success is in guiding clients through every stage of facility management. From preparing financial presentations to negotiating with underwriters, we ensure your company is positioned as a top-tier candidate.
By working with a dedicated surety team, you gain access to industry insight, market leverage, and strategic planning that put you ahead of competitors.
Key Takeaways
- Plan Early: Begin remarketing discussions at least 6–12 months before major project bids.
- Review Limits: Ensure your single job and aggregate limits reflect your growth targets.
- Strengthen Financials: Invest in audited or reviewed statements to increase credibility.
- Tell Your Story: A strong business narrative supports underwriting decisions.
- Work with Experts: Choose a broker with deep surety experience and established relationships.
And Finally…Don’t Wait Until 2026 to Remarket Your Bonding Facility
Remarketing your bonding facility is about staying ahead of the curve. With significant infrastructure opportunities on the horizon and a tightening surety market, Canadian contractors cannot afford to wait until the last minute.
By reviewing your bonding limits, capacity, and surety relationships today, you can position your company for success in 2026 and beyond.
The Surety Team at Ferrari & Associates is here to help contractors secure the bonding support they need to win more work, manage risk, and grow with confidence. To get in touch with our Surety Team, or to start your quote process, please fill out our surety form.