The U.S. Small Business Administration (SBA) this week announced the first fee decrease in Surety Bond Guarantees in 12 years.
The fee decrease will be in effect for guaranteed bonds approved during fiscal year 2019, taking effect October 1, 2018 and ending September 30, 2019.
SBA’s Surety Bond Guarantee (SBG) program is reducing the surety fee from 26 percent to 20 percent of the bond premium charged to the small businesses and is reducing its contractor fee from $7.29 per thousand dollars of the contract amount to $6.00 per thousand dollars of the contract amount.
“Reducing the SBG program fees will not only directly help small businesses, but also will incentivize surety companies and their agents to increase support for small businesses in the marketplace,” said Peter C. Gibbs, Acting Director of SBA’s Office of Surety Guarantees.
Under the SBG program, the SBA guarantees bid, payment, and performance bonds for small and emerging contractors who cannot obtain surety bonds through regular commercial channels. SBA guarantees contracts up to $10 million, including the streamlined QuickApp application for those up to $400,000.
The SBA’s guarantee gives sureties an incentive to provide bonding for small businesses and, thereby, assists small businesses in obtaining greater access to contracting opportunities. Currently, there are 34 participating sureties and over 350 active agents in the SBG program. On average, completed surety bond applications are reviewed and processed in less than two days.
The program is currently outperforming its previous year results yielding 27,000 jobs supported, 3,000 final bonds, and $1.7 billion in final bond contract amounts in fiscal year 2018.
For more information about this decrease or to obtain assistance, contact Jermanne Perry, Senior Management Analyst, Office of Surety Guarantees, (202) 401-8275; email@example.com, or your local SBA District Office.