Understanding SBA Surety Bonds
Explore how SBA Surety Bonds can empower your small business to secure larger contracts and grow with confidence.
What Are SBA Surety Bonds?
SBA Surety Bonds are a type of surety bond guaranteed by the U.S. Small Business Administration (SBA). These bonds help small businesses obtain the necessary bonding to bid on contracts, especially when they face challenges in the standard surety market. The SBA Surety Bond Guarantee Program offers bid, performance, payment, and ancillary bonds, providing a safety net for both the contractor and the project owner. By participating in this program, small businesses can compete for larger contracts and demonstrate their reliability and financial stability.
Frequently Asked Questions About SBA Surety Bonds
Get answers to the most common questions about SBA Surety Bonds and how they can benefit your business.
What is an SBA Surety Bond?
An SBA Surety Bond is a bond guaranteed by the U.S. Small Business Administration, designed to help small businesses secure the bonds they need to bid on contracts.
Why do I need an SBA Surety Bond?
SBA Surety Bonds are essential for small businesses that need bonding to bid on contracts but face difficulties obtaining bonds through traditional surety markets. These bonds can help you compete for larger projects and grow your business.
What types of bonds does the SBA guarantee?
The SBA guarantees bid bonds, performance bonds, payment bonds, and ancillary bonds, covering the most common types of contract surety bonds required in various industries.
How much does an SBA Surety Bond cost?
The cost of an SBA Surety Bond includes the surety company’s premium and the SBA fee, which is $6 per $1,000 of the contract amount for the first $100,000, and $9 per $1,000 for amounts over $100,000.
How long does it take to get approved for an SBA Surety Bond?
Approval times vary. For contracts up to $500,000 that qualify for the QuickApp program, decisions are often made within hours. Larger or more complex applications may take several days to a few weeks.
What is the maximum contract amount for an SBA-guaranteed bond?
The SBA can guarantee bonds for contracts up to $6.5 million, or up to $10 million for federal contracts awarded under specific conditions.