Surety Bond Guarantee Program for Small Contractors
Does this program apply to all surety bond types?
No. The SBA’s Surety Bond Guarantee Program can only be used for obtaining surety bonds classified under the contract bond umbrella. However, other types of surety bonds, such as license and permit bonds, may be authorized as well, as long as they are written in conjunction with a contract bond.
So how does this program work?
The SBA does not write surety bonds for eligible companies, but instead guarantees to reimburse participating sureties for a specified portion of any losses incurred as a result of a small contractor’s breach of contract (i.e. 70-90% of losses). Participating sureties must also pay the SBA a fee for using their backing to guarantee all bonds written via the Surety Bond Guarantee Program. In the unfortunate event that a claim against someone bonded under this program, the SBA must be notified in a timely manner. The participating surety is responsible for handling all aspects of a claim before seeking reimbursement from the SBA.
For more information on how to apply for the SBA’s Surety Bond Guarantee Program, click the following link: http://www.sba.gov/aboutsba/sbaprograms/osg/OSG_HOWTOAPPLY_SBOND_GUARANTEE.html.
Latest posts by Victor J. Lance, President/Owner (see all)
- Your Arizona Contractor License Guide - July 6, 2020
- Your Quick Guide to Becoming a Licensed Contractor in New Jersey - July 5, 2020
- How To Become a Contractor: 2020 Survival Guide - June 17, 2020