SBA’s Surety Bond Guarantee Program Teams Up with ASA
Posted: January 22, 2021 | Tradewinds
The U.S. Small Business Administration (SBA) offers guarantees on contract surety bonds to help small businesses in the construction, supply, and service sectors to better compete for contracting and subcontracting jobs.
SBA’s Office of Surety Guarantees (OSG) has provided growth opportunities to small businesses for over 50 years. In 1970, the Surety Bond Guarantee (SBG) Program was established by the Housing and Urban Development Act. In its first year of operations, the program guaranteed seven final bonds with a contract value of approximately $315,000. In FY20, the program guaranteed over 11,000 bonds, totaling over $7 billion.
SBA is collaborating with the American Subcontractors Association (ASA) to ensure its small business members are aware of growth benefits available to them through SBA’s SBG Program. Members can look forward to SBA’s participation in bonding webinars and events with ASA this year. Even if you can’t attend an event with SBA, we encourage small businesses to learn about the benefits of the SBG Program on www.sba.gov/osg today.
Grow Your Business
Surety bonds help small businesses secure contracts by providing a customer with a guarantee that the work will be completed according to contract terms and conditions. Through SBA, subcontractors can obtain bonds with reasonable terms and higher limits.
SBA-guaranteed surety bonds are often an ideal option for:
Subcontractors with a desire to establish independent bonding credit.
Small businesses that want to increase their current bonding limits.
Startups and firms in business for less than three years.
Small businesses with credit issues or internally prepared financial statements.
Small businesses being required to supply collateral or funds control in order to secure surety bonds through regular commercial channels.
For eligible contracts under $400,000, the application process is streamlined using the SBA’s QuickApp - an easy online application submitted to SBA-authorized agents. These applications do not require financials, and applications are quickly assessed and approved. Finally, all bond guarantee applications submitted to SBA are underwritten in less than two days.
Are you interested in surety bonds? Learn more about the SBA advantage on our website at www.sba.gov/osg.