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Any surety company certified by the U.S. Treasury to issue bonds may apply for participation in the Prior Approval Program, but its bonds are subject to SBA's prior review and approval.  SBA guarantees 90 percent of the losses incurred on bonds up to $100,000 and on bonds to socially and economically disadvantaged contractors, and 80 percent of the losses incurred on all other bonds under this program.


A surety company interested in participating in SBA’s Prior Approval Program must meet the following guidelines:

  • Surety must be a corporation approved by the U.S. Treasury to issue bonds in connection with Federal contracts (13 CFR 115.11).

  • Surety cannot charge a bond premium in excess of that authorized by the applicable state insurance department, or impose any non-premium fee unless such a fee is permitted by applicable state law and approved by SBA (For more information, see 13 CFR 115.60).

  • Surety must comply with all regulatory requirements specified in Code of Federal Regulations Part 115, Subparts A&B (13 CFR 115 ).

  • Surety must agree to use standards generally accepted by the surety industry in underwriting bond applications. These standards and must be used on both SBA and non-SBA guaranteed bonds.

  • Surety must not sell or transfer its files or accounts unless it has obtained SBA’s prior written approval; does not apply to the sale of an entire business division, subsidiary, or operation of the surety (13 CFR 115.12(f)).

Application Requirements

Applications for SBA’s Prior Approval Program must include the following information:

  • Identification of the corporate entity that is applying, and the name and title of key executives.

  • A statement indicating that there are no current mergers or changes in top level management which might adversely affect participation in the program.

  • Narrative summary, including a mission and vision statements, describing why the applicant wishes to participate in the program.

  • Applicant’s performance over each of the past three years

    • Number of bonds issued and total dollar value.

    • Number of contract defaults and total contract dollar value.

    • Total annual dollar value of recoveries.

    • Annual loss rate.

  • Projected annual SBA bond guarantee activity, including an estimate of the number of bonds and total dollar value, over each of the first three years of program participation.

  • Narrative summary of the standards, processes, and procedures for underwriting; include copy of manual(s).

  • Narrative summary of standards, processes and procedures for administering and paying claims, and submitting claim reimbursement requests to SBA; include copy of manual(s).

Applications should be sent to:
Office of Surety Guarantees
Attn: Mr. Frank Lalumiere
409 Third Street S.W.
Suite 8600
Washington, D.C. 20416

For More Information

For more information, contact the Office of Surety Guarantees (OSG).