Why Underwriters Love Your Cash Flow (And Why You Should Too!)

When it comes to underwriters, cash flow is like the perfect love song—it’s got rhythm, harmony, and hits all the right notes. While underwriters might not swoon openly, trust me, a solid cash flow can make their hearts flutter. Here’s why your cash flow is the unsung hero of bonding and why you should give it the love it deserves.


  1. Cash Flow Keeps the Lights On (Literally and Figuratively)
    • Think of cash flow as your company’s lifeblood. It’s what keeps your projects humming, your employees happy, and your subcontractors paid on time. To an underwriter, a business with strong cash flow signals reliability. It tells them, “Hey, this contractor can weather the storms, pay their bills, and still have enough left over to grab a coffee”.
  2. It’s a Trust Issue (And Underwriters Have Trust Issues)
    • Underwriters are natural skeptics. Their job is to ask, “What could go wrong?” A business with erratic cash flow sets off alarm bells—it’s like dating someone who only texts back at 2 a.m. But when your cash flow is steady and predictable? That’s relationship material. It reassures underwriters that your business won’t ghost them when it’s time to pay suppliers or meet payroll.
  3. Because Profit Isn’t Always King
    • Here’s the secret sauce: profit is great, but it’s not enough. You can have the fattest profit margins on paper, but if you’re not collecting payments fast enough to cover expenses, your business is like a fancy car with no gas—it looks great, but it’s not going anywhere. Underwriters love cash flow because it’s the real proof that your business is functional, not just financially photogenic.
  4. Cash Flow Is the Crystal Ball of Business
    • To an underwriter, your cash flow is like a fortune teller’s crystal ball. A healthy cash flow indicates that you’ve got your act together and can handle the ebb and flow of construction projects. It shows that you’ve planned for delays, unexpected costs, and the occasional client who seems to think invoices are suggestions.
  5. It’s All About Risk Management
    • Let’s be real: bonding companies are in the risk business. A contractor with great cash flow reduces risk because they can handle hiccups without falling apart. A healthy cash flow shows underwriters that even if things go sideways, you’ll figure it out and keep the train on the tracks. And that? That’s music to an underwriter’s ears.

What Does This Mean for You?

If you’re looking to impress your underwriter (and you should be), start by showing your cash flow some love. Here’s how:

  • Invoice Faster: Don’t wait to send those bills! The faster you invoice, the faster cash comes in.
  • Collect What’s Due: Stay on top of outstanding receivables like your business depends on it—because it does.
  • Budget Wisely: Know when to spend, when to save, and when to politely decline that unnecessary equipment upgrade.
  • Plan for the Lulls: Construction is a cyclical business. A cash cushion for slower periods will keep your underwriter smiling.

Final Thoughts

Cash flow isn’t just a boring accounting term—it’s the heartbeat of your business and the key to winning over your underwriter. Treat it right, and it’ll not only help you land bigger projects but also make sure your bonding relationship stays strong.

So, the next time you’re prepping your financials, remember: your underwriter isn’t just looking for numbers—they’re looking for signs of life, health, and a business they can trust. And nothing says “trust me” quite like a cash flow that’s as smooth as a Frank Sinatra ballad.

Now go ahead, charm those underwriters with your cash flow prowess!