Date Published: October 30, 2013
The U.S. Small Business Administration (SBA) Surety Bond Guarantee Program provides an important avenue for small and emerging contractors to obtain performance and payment bonds. Surety1 now has access to the SBA program with access to multiple underwriting companies. SBA guarantees bid, performance and payment bonds issued by surety companies. This Federal guarantee encourages surety companies to bond small businesses who are having difficulty obtaining bonding on their own.
The SBA bond program has expanded a lot in recent history. From developing a “short” application program to expanding the size of bonds it will entertain, the SBA is taking an active role in assisting small businesses to obtain surety bonds. The last recession was particularly hard on contractors, decimating the balance sheets of many a contractor. Many qualified builders are denied access to bonding because of the financial condition. With SBA backing the surety companies that underwrite the risk can afford to approve performance bonds they would otherwise decline.
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