SBA increases access to bonds for small businesses

The U.S. Small Business Administration has made it easier for small business to obtain bonds as part of its Surety Bond Guarantee Program.

New rules establish a more flexible pricing structure, allowing Preferred Surety Bond Sureties to charge current state rates rather than being locked into rates that have become outdated and unwieldy.

Corporate surety bonds protect project owners against financial loss, and in the case of public construction projects, protect taxpayer dollars if the contractor defaults.

The new rules reduce the frequency of audits previously required of PSB sureties, obligate SBA to guarantee 90 percent of the loss incurred by a prior approval surety on bonds issued on behalf of small businesses owned and controlled by veterans and service- disabled veterans, impose a 60-day deadline for the submission of surety fees to the SBA, allow PSB sureties to charge premiums in accordance with applicable state ceilings, delete existing reference to the expiration of the PSB Program and allow affiliates of a PSB surety to participate in the prior approval program.

Through the Surety Bond Guarantee Program, SBA guarantees bid, payment and performance bonds on contracts up to $2 million in value.

For more information, visit www.sba.gov/osg or call (800) U-ASK- SBA.

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