The Small Business Administration (SBA) guarantees bid, performance, and payment surety bonds issued by certain surety companies.
Surety bonds help small businesses win contracts by providing the customer with a guarantee that the work will be completed. Many public and private contracts require surety bonds, which are offered by surety companies. 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.
SBA guarantees contract bonds, but doesn’t guarantee commercial bonds. Contract bonds ensure the terms of a specific contract are fulfilled. Commercial bonds ensure all applicable laws and regulations are followed. Government agencies require certain companies or individuals to obtain commercial bonds, which protect the general public against things like fraud.
Some contracts require surety bonds that cover specific situations. SBA guarantees surety bonds that cover several major categories of work.
All performance and payment bond guarantees require small businesses to pay SBA a fee of 0.6% of the contract price. If for some reason the bond is cancelled or not issued, SBA will return the guarantee fee. SBA does not charge a fee for bid bond guarantees.
Determine your small business’s level of eligibility before obtaining a surety bond. Does your business meet the following requirements?
Check the database of surety agencies that offer SBA-guaranteed bonds.
Explore the Department of Transportation's Bonding Education Program.
Short URL: sba.gov/surety-bondsReceive information about upcoming SBA events, news alerts, and program updates.
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