Yes, you can get a payment bond alone, but it is uncommon and comes with real limits
A payment bond is a separate contract that guarantees a contractor will pay suppliers, laborers, and subcontractors. You do not have to buy a performance bond at the same time. However, most project owners and construction lenders require both together, so getting only a payment bond usually means you are working on a private project with an owner who has explicitly waived the performance bond requirement.
Payment bonds exist to protect the people who supply materials and labor to a job. A performance bond protects the project owner if the contractor fails to finish the work. They serve different purposes, which is why they are often purchased as a pair—but they are legally separate products, and a surety company can issue one without the other.
The real friction comes when you try to use a payment bond alone on a project that expects both. If you are bidding on public work, a federal project, or anything financed by a bank or institutional lender, you will almost certainly be required to post both bonds. If you are working directly for a private owner who does not require a performance bond, you may be able to proceed with payment bond coverage only.
Key Takeaways
- Payment bonds and performance bonds are separate products; a surety will issue a payment bond alone if you request it and meet their underwriting standards.
- Public projects, federally funded work, and bank-financed construction almost always require both bonds together; private projects may allow payment bond only.
- Getting a payment bond alone is cheaper than buying both, but it signals to lenders and project owners that you lack performance coverage, which can hurt your reputation and bidding power.
- A surety company will still underwrite you for a payment bond alone based on your financials, experience, and the project scope—the requirements do not disappear just because you are skipping the performance bond.
When a payment bond alone is actually workable
Payment bonds work as standalone products on private projects where the owner has decided not to require performance coverage. This happens most often when a property owner is hiring a contractor directly, knows the contractor's work, and is comfortable accepting the risk that the contractor might not finish. In that case, the owner may ask only for a payment bond to protect the workers and suppliers on the job.
Some contractors also use payment bonds alone on smaller residential or light commercial jobs where the owner is not borrowing money and has no lender imposing bond requirements. If you are doing a kitchen remodel, a deck, or a small renovation for a homeowner who is paying out of pocket, the owner might say "I just want a payment bond to make sure my suppliers get paid" and skip the performance bond entirely.
The other scenario is when you are a subcontractor or material supplier working under a general contractor who has already posted both bonds for the whole project. In that case, you may not need your own payment bond at all, because the general's bond already covers you. But if you are the prime contractor on a private job, a payment bond alone is possible if the owner explicitly waives performance coverage in writing.
Why sureties will still underwrite you carefully
A surety company does not lower its standards just because you are buying only one bond instead of two. They will still review your financial statements, your project history, your experience with similar work, and the scope and timeline of the job you are bonding. The underwriting process is the same; you are just not buying the second product.
In fact, some sureties view a payment-bond-only request with caution. If you are a contractor with the financial strength and track record to get bonded, why would you skip performance coverage? A surety might wonder whether you are hiding something—whether you are undercapitalized, have had past performance issues, or are taking on work you are not confident you can finish. That perception can make underwriting harder, not easier.
You will still need to provide tax returns, bank statements, a list of recent projects, and references. You will still need to show that you have the equipment, crew, and experience to complete the work. The surety will still set a premium based on the bond amount and the risk they perceive. Buying only a payment bond does not mean a faster or cheaper underwriting process—it just means you are not paying for the second product.
The cost difference between one bond and two
A payment bond typically costs between 0.5% and 3% of the bond amount per year, depending on your credit, financials, and the surety's assessment of the project risk. A performance bond costs roughly the same. If you are bonding a $500,000 project, a single payment bond might cost $2,500 to $15,000, while both bonds together might cost $5,000 to $30,000.
The savings from skipping the performance bond are real, but they come with a trade-off: you lose the ability to bid on any work that requires both bonds, and you signal to potential clients that you do not have full coverage. For most contractors, the cost savings are not worth the loss of bidding power and credibility.
If you are working on a private project where the owner has explicitly waived performance coverage, the savings might make sense. But if you are trying to save money on bonding costs while keeping your options open for other work, buying both bonds is usually the better long-term choice.
What happens if you need a performance bond later
If you start a project with only a payment bond and the owner later asks for a performance bond, you can request one from your surety. However, the surety may decline, may require additional underwriting, or may charge a higher premium because you are mid-project and they have less time to assess the risk. It is much cleaner to have both bonds in place before work begins.
If you are bonding a project that you think might expand or lead to follow-up work, getting both bonds from the start protects you from having to scramble later. The cost difference is not large enough to justify the risk of being caught without coverage when you need it.
How to request a payment bond only from a surety
When you contact a surety company, tell them upfront that you need a payment bond only and explain why—whether it is because the project owner has waived performance coverage or because you are a subcontractor working under another contractor's bonds. Be prepared to provide documentation that the owner does not require a performance bond, such as a contract clause or a written waiver.
The surety will ask the same questions they would for a two-bond package: your financials, your experience, the project scope, the timeline, and the bond amount. They will underwrite you based on the same criteria. If they approve you, they will issue the payment bond and quote you a premium. If they decline, it is usually because they do not believe you have the financial strength or experience to complete the work—not because you are asking for only one bond.
Some sureties have relationships with specific contractors or project types and may be more willing to issue a payment bond alone. If your regular surety is hesitant, you can shop the request to other bonding companies. But be honest about why you need only a payment bond; sureties talk to each other, and misrepresenting your situation will damage your credibility.
Red flags that a payment-bond-only request will not work
If you are bidding on public work, do not bother asking for a payment bond alone. Federal, state, and local government projects require both bonds by law. The same applies to any project financed by a bank, credit union, or institutional lender—they will not fund the work without performance coverage.
If the project owner says they do not require a performance bond but the work is being financed by a lender, the lender's requirements override the owner's preferences. You will need both bonds. Similarly, if the project is large enough to require a general contractor, and the general contractor is bonded, you may not need your own payment bond at all—but if you do, you will almost certainly need a performance bond too.
If you are a new contractor with limited experience or weak financials, a surety is unlikely to issue a payment bond alone, because they will see it as a sign that you are trying to cut corners. Build your track record and financial strength first, then revisit the question if you genuinely have a private project that does not require performance coverage.
Frequently Asked Questions
Can I get a payment bond without a performance bond on a construction loan project?
No. Construction lenders require both bonds as a condition of funding. If the project is financed by a bank or lender, you will need both a payment bond and a performance bond before the lender will release funds. This is not negotiable.
What if the project owner says they do not need a performance bond?
If the owner is paying out of pocket and has no lender, they can waive the performance bond requirement in writing. Get that waiver in your contract before you request the payment bond from your surety. The surety will want to see it.
Is a payment bond alone cheaper than buying both bonds?
Yes, roughly half the cost. But the savings are usually outweighed by the loss of bidding power. Most contractors buy both bonds because it keeps their options open for any type of project.
Will a surety underwrite me differently if I ask for only a payment bond?
No, the underwriting standards are the same. They will review your financials, experience, and the project scope the same way. Some sureties may view a payment-bond-only request with suspicion, but the underwriting process itself does not change.
What if I need a performance bond after I have already started with a payment bond only?
You can request one from your surety, but they may decline, require additional underwriting, or charge a higher premium because you are mid-project. It is better to have both bonds in place before work begins.