If you’re a small contractor, an upcoming change to the SBA’s surety bond program could help you compete for more and bigger projects.

As part of the most recent National Defense Authorization Act, the U.S. Small Business Administration will be able to guarantee a greater percentage of surety bonds processed by its program. Starting with Fiscal Year 2017, the maximum guarantee will increase from 70 percent to 90 percent.

The SBA doesn’t provide bonds directly to clients. Rather, it backs bonds that surety companies offer.

In the event that a contractor doesn’t complete a project, the bond helps the contractor’s client to complete that project. The SBA’s guarantee encourages surety bond companies to grant bonds to small contractors that it might otherwise deny.

“This is the first significant legislative change to the surety bond guarantee program in several decades,” said Frank Lalumiere, the director of the SBA’s surety bond guarantee program. “It will provide increased incentives for surety bond companies and bond producers to participate in the program, which will expand contracting opportunities for small businesses across the country.”

You can learn more about the SBA’s surety bond initiative by visiting this website.