SBA makes changes to its surety bond program

Written on Sep 27, 2017

The U.S. Small Business Administration has noted two important changes to its Surety Bond Guarantee Program that will increase contract opportunities for small contractors and encourage them to grow business operations. The changes went into effect Sept. 20.

The SBA will increase the guarantee percentage in the Preferred Surety Bond Program from no more than 70% to no more than 90%. The SBA’s guarantee will be 90% if the original contract amount is $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%.

The eligible contract amount for the Quick Bond Application will increase to $400,000 from $250,000. 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.

Through its SBG Program, consisting of the Prior Approval and the Preferred Surety Bond Programs, the SBA 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.

For more information on the SBA’s Surety Bond Guarantee Program, visit

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