How Much Does a Performance Bond Cost on a $1M Contract in the Southeast (2026)?

Q: How much does a performance bond cost on a $1M contract in the Southeast in 2026?

For a $1M public contract in GA, FL, SC, NC, or TN, a contractor performance bond in 2026 typically costs $10,000-$30,000 (1-3% of contract value). Preferred credit contractors pay 0.75-1.25%; standard credit pays 1.25-2.25%; substandard credit with SBA guarantee pays 2.5-4%.

Q: Is bond premium refundable if the project is cancelled?

Only pro-rata if cancelled before work commences. Once work starts, the surety has earned the full premium regardless of project outcome.

Q: Can I get a $1M bond with sub-650 credit?

Yes, through SBA bond guarantee programs or with cash/CD collateral. Rates run 2.5-4% versus 0.75-1.25% for preferred credit.

By Winfield Lee, Licensed Independent Insurance Agent · Georgia License #230978 · Updated 2026

Short answer

For a $1,000,000 public contract in Georgia, Florida, South Carolina, North Carolina, or Tennessee, a contractor performance bond in 2026 typically costs $10,000-$30,000 (1-3% of contract value). The exact rate depends on the contractor personal credit score, business financial statements, prior bonded work experience, and remaining bonding capacity with the surety.

Rate tiers by contractor credit tier (2026 SE market):

• Preferred credit (700+ FICO, clean CPA-audited financials): 0.75-1.25% ($7,500-$12,500 on $1M)
• Standard credit (650-700 FICO, reviewed financials): 1.25-2.25% ($12,500-$22,500 on $1M)
• Substandard credit (below 650 or thin financials): 2.5-4% ($25,000-$40,000 on $1M) with SBA guarantee or collateral requirements

What drives SE contractor bond premium

1. Personal credit score of the owner/principal

Sureties pull personal credit on all owners with 20%+ equity. FICO score 700+ opens preferred pricing. Below 650, expect standard-rate quotes with cash collateral or SBA guarantee requirements.

2. Business financial strength

Working capital, net worth, and 3-year financial history all matter. Sureties typically require working capital equal to 10-20% of the largest single bonded project and net worth equal to 10-20% of aggregate bonding capacity.

3. Prior bonded work history

Contractors with 3+ years of successful bond claims (or no bond claims) qualify for preferred rates. New-to-bonding contractors are often placed in SBA guarantee programs.

4. Type of work and risk profile

General construction < specialty trades < hazardous work. GDOT road work is preferred; environmental remediation and blasting operations pay premium rates.

SE state-by-state bonding considerations

Georgia

Public work over $100K requires bid + performance + payment bonds. GDOT and DBE contractors have strong bonding relationships. Common markets: Merchants, Sunbelt, RLI, Zurich.

Florida

Miller Act bonding for federal work. FDOT and state agencies use standard AIA bonding forms. Florida DBE prequalification requires stable bonding history.

South Carolina

SCDOT prequalification requires financial statements plus 3-year bonding history. Municipal contracts typically require 100% performance + 100% payment.

North Carolina

NCDOT prequalification tiers by contract value. Small businesses under DBE certification get access to preferred bonding pools.

Tennessee

TDOT prequalification includes bonding capacity review. Tennessee has strong regional surety relationships (Merchants Bonding, Zurich, Liberty Mutual).

How to get a lower rate on your next $1M bond

Maintain 12+ months of consistent CPA-reviewed financials. Compiled statements limit you to standard tier; reviewed unlocks preferred; audited is best but often unnecessary under $2.5M in bonding.
Fix personal credit issues before applying. Pay down credit utilization to under 30%, dispute errors, and give it 90 days to reflect. Every 20-point FICO improvement can drop your bond rate 15-25 basis points.
Build bonding capacity gradually. Start with smaller projects. Build a claim-free 3-year history. Larger sureties will then accept bigger bonded contracts at preferred rates.
Use SBA bond guarantee for growth. SBA guarantees up to $9M in bond coverage for small contractors, often at rates 30-40% lower than standard-tier quotes.

Need a $1M+ bond quote?

BettrBonds (sister brand) has direct access to Merchants, Sunbelt, RLI, Zurich, Liberty Mutual, and specialty SE surety markets.

Get a free bonding capacity review

Common $1M bond questions

Is bond premium refundable if the project is cancelled?

Only pro-rata if cancelled before work commences. Once work starts, the surety has earned the full premium regardless of project outcome.

What is the difference between a performance bond and a payment bond?

Performance bond protects the owner against contractor default. Payment bond protects subs and suppliers from non-payment. Public work typically requires both at 100% of contract value each.

Can I get a $1M bond with sub-650 credit?

Yes, through SBA bond guarantee programs or with cash/CD collateral. Rates run 2.5-4% versus 0.75-1.25% for preferred credit.

How long does it take to get a $1M bond in the Southeast?

Established contractors: 24-48 hours. First-time bond applicants: 2-4 weeks including underwriting review. Complex or hazardous work: 4-8 weeks.

Do I need bonding for private commercial work?

Not required by law, but many private owners (GCs subbing to major GCs, hospital systems, university systems) require bonds. Non-public bonding cost is similar to public work rates.

For general information only. Not a quote or contract of insurance. Coverage subject to underwriting, policy terms, and carrier appetite.