SBA Increases Surety Bond Guarantee Limits

The U.S. Small Business Administration is increasing the statutory contract limits for the Surety Bond Guarantee program this spring.

The SBA will begin guaranteeing bid, performance, payment, and ancillary bonds up to $9 million for all projects and up to $14 million on federal contracts starting March 18.

The SBA can guarantee bonds on federal contracts over $9 million with a federal contracting officer’s signed certification, or if the contract is located in a major disaster area.

SBA officials hope the change will increase revenue opportunities for small businesses. 

“The SBA remains committed to helping small businesses compete for and win these contracts,” said SBA Administrator Isabel Guzman.

Surety Bonds Program

Surety bonds help small businesses win contracts because they guarantee work will be completed. 

SBA guarantees surety bonds for certain surety companies, which allows the companies to offer surety bonds to small businesses that might not meet the criteria for other sureties.

Businesses can go through a simplified guarantee application through SBA’s QuickApp for contracts up to $500,000. It allows for limited paperwork and approvals within hours. 

All performance and payment bond guarantees require small businesses to pay SBA 0.6% of the contract price.