Eligibility for the SBA Surety Bond Guarantee Program
Eligibility for the SBA Surety Bond Guarantee Program
The Small Business Administration Surety Bond Guarantee Program ensures a portion of a surety bond as a way of making sure of the participation. This sometimes becomes the reason why contracts are signed and the small businesses gets customers. The program is unlike other SBA guaranteed loans programs. There are three surety bond guarantee programs offered by the SBA currently.
- Prior Approval Program: Under this, the surety bond guarantees are approved individually by the SBA.
- Quick Bond Program: This can be taken as a subcategory of the Prior Approval Program, and is useful for those companies with an occasional need for a bond. The offered programs stress paperwork requirements and underwriting in return for small maximum guarantee amounts.
- Preferred Surety Bond Program: In this program, the participating surety agent reserves the rights to service, monitor, and issue service surety bonds without the need for SBA’s approval. There might be big differences when it comes to surety agents due to their different interaction with the SBA.
Terms and Fees
Guaranteed Percentage: this is the highest possible percentage of contract value guaranteed by the SBA. This is 90% for contracts up to a maximum of $100,000 for businesses which are monitored by economically and socially backward individual, veterans, and service-disabled veterans.
