SBA guarantees surety bonds
Surety bonds help small businesses win contracts by providing the customer with a guarantee that the work will be completed. Many public and private contracts require surety bonds, which are offered by surety companies. The SBA guarantees surety bonds for certain surety companies, which allows the companies to offer surety bonds to small businesses that might not meet the criteria for other sureties.
How the SBA Surety Bond Program works
Some contracts require that the business doing the work be properly bonded.
Authorized surety companies provide surety bonds to businesses that meet their qualifications.
The SBA guarantees surety bonds for private surety companies, so more small businesses can qualify.
Small businesses get SBA-guaranteed surety bonds so they can get to work.
The right surety bond for the project
Some contracts require surety bonds that cover specific situations. The SBA guarantees surety bonds that cover several major categories of work.
Ensures full payment and performance bonding from the contract bidder.
Ensures full payment to the suppliers and subcontractors.
Ensures full completion of a contract by small business.
Ensures completion of requirements outside of performance or payment, such as maintenance.
Bond Guarantee Fee
All performance and payment bond guarantees require small businesses to pay the SBA a fee of .6% of the contract price. If for some reason the bond is cancelled or not issued, the SBA will return the guarantee fee. The SBA does not charge a fee for bid bond guarantees.
Determine your small business’s level of eligibility before obtaining a surety bond. Does your business meet the following requirements?
Qualify as a small business according to the SBA’s size standards.
Up to $6.5 million for non-federal contracts and up to $10 million for federal contracts.
Meet the surety company’s credit, capacity, and character requirements.
Find authorized agents
Contact a surety bond agency
Check the database of surety agencies that offer SBA-guaranteed bonds.
Are you a transportation-related small business?
Explore the Department of Transportation's Bonding Education Program.