Starting with fiscal year 2019, small businesses will have access to lower surety bond rates through the U.S. Small Business Administration’s Surety Bond Guarantee (SBG) program.
Surety bonds allow small businesses to bid contracts that are bonded to assure future work is completed. The SBA’s program guarantees bid, performance and payment bonds issued by certain surety companies for small contractors who are otherwise unable to secure bonds.
Effective Oct. 1, the surety fee under the SBG will decrease from 26 to 20 percent for small businesses utilizing the program on all approved bonds; additionally, the contractor fee per $1,000 will drop from $7.29 to $6.00. The fee decreases are the first in 12 years.
“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 Gibbs, acting director of the Office of Surety Guarantees.
In fiscal year 2018, the SBG has produced 27,000 jobs supported by 3,000 approved bonds, resulting in $1.7 million in final bond contracts.