Is Your Small Business Eligible for an SBA Surety Bond Guarantee?

Several factors are taken into consideration when determining eligibility. To be eligible for a surety bond guarantee:

• Your business must be classified as small. The business combined with its affiliates must not exceed the size standard designated for the business' primary industry. Part 13, Section 121.201 of the Code of Federal Regulations (CFR) provides a listing of size standards by industry Sector and Subsector. 

• Your business must be unable to obtain a bond without an SBA guarantee. (In other words, you have no other resource from which to obtain such a bond.)

• The size of the public or private contract or subcontract cannot exceed $2 million.  

• The credit, capacity and character evaluations of the company's Principal must support issuance of a bond guaranteed by SBA. Upon concluding its underwriting process, the Surety must have a reasonable expectation that the Principal will successfully complete the contract.

• The contract must require a bond to be eligible.