Two important changes to the U.S. Small Business Administration’s Surety Bond Guarantee (SBG) Program will provide local small contractors with increased opportunities to secure additional contracts to help them grow their business operations, it was announced today.
According to SBA NJ District Director Al Titone, the changes become effective on September 20, 2017 and will increase the guarantee percentage in the agency’s Preferred Surety Bond Program from 70 percent up to 90 percent. The SBA’s guarantee will be 90 percent for contract amounts of $100,000 or less, or if the bond is issued to a small business that is owned and controlled by socially or economically disadvantaged individuals, veterans, service disabled veterans, or certified HUBZone and 8(a) businesses. All other guarantees will be 80 percent.
The eligible contract amount for the Quick Bond Application (Quick Bond) will also increase from $250,000 to $400,000. The Quick Bond is a streamlined application process, with reduced paperwork requirements, that is used in the Prior Approval Program for smaller contract amounts. SBA’s review and approval requires minimal time, allowing small businesses to bid on and compete for contracting opportunities without delay.
“There are over 75,000 small construction firms in New Jersey that can benefit from the new changes made to SBA’s Surety Bond Guarantee Program said Titone. “It certainly will help small contractors to secure contracts with municipal, state and federal projects, as well as opportunities with the private sector.
Titone explained that a surety bond ensures contract completion in the event of contractor default. By providing surety guarantees, SBA is able to help qualified small and emerging contractors secure a bond by connecting them with surety companies that partner with the agency. “For many small contractors, securing a bond is the difference maker in receiving a contract,” said Titone.
Under SBA’s Prior Approval and the Preferred Surety Bond Programs, the agency guarantees bid, payment and performance bonds for contracts that do not exceed $6.5 million, and up to $10 million with a federal contracting officer’s certification. The SBA’s guarantee encourages the surety company to issue a bond that it would not otherwise provide for a small business.Related Articles: