WASHINGTON, March 10, 2014 /PRNewswire-USNewswire/ -- With the help of the Small Business Administration's Surety Bond Guarantee Program small construction firms were awarded in fiscal year 2013 more than $1.2 billion in contracts. This number represents a 61 percent increase over fiscal year 2012. SBA also guaranteed bonds for public and private contract bids valued at $4.9 billion, resulting in a total contract amount of more than $6.1 billion.
"The Surety Bond Guarantee program, along with our loan programs, provides small businesses with significant opportunities to grow and create jobs, which translates into stronger local economies," said Ann Marie Mehlum, SBA Associate Administrator for the office of Capital Access, which oversees the SBG program. "2013 was a banner year and we look forward to an even better 2014 helping small businesses bid for and obtain contracts."
SBA guarantees bid, performance and payment bonds issued by surety companies. This guarantee encourages surety companies to bond small businesses who are having difficulty obtaining bonding on their own. For the past seven years, the Surety Bond program maintained a steady upward trend in every key measure, including the number of bond guarantees issued, contract dollars awarded to small businesses and number of small businesses assisted. To assure continued growth of the program, SBA implemented several enhancements geared toward streamlining the underwriting process and providing easier access for surety companies in the eastern part of the country.
The Quick Bond Guarantee Application can be used for contracts valued at $250,000 or less and reduces the majority of paperwork and other underwriting information required of sureties and small businesses on larger contracts. The Quick App allows SBA and surety companies to issue bonds faster for small businesses.
Another enhancement to the program was the opening, earlier this year, of a new underwriting office in Washington, D.C. The new office services small businesses and surety companies located in the following states: Alabama, Connecticut, Delaware, Kentucky, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, Tennessee, Virginia, Vermont, West Virginia and the District of Columbia. The rest of the country is serviced by two SBG area offices located in Denver and Seattle.
Through the Surety Bond Guarantee program, SBA guarantees bonds issued by private surety companies, providing small businesses with contracting opportunities. The maximum contract ceiling in the program was increased from $2 million to $6.5 million by the National Defense Authorization Act of 2013. This change is bound to have a big impact as it comes just in time for an expected turnaround in the construction industry. The United States will soon be spending billions of dollars in needed infrastructure investment, and SBA's Surety Bond Guarantee Program will help to ensure small businesses play a significant role. SBA assistance in locating a participating surety company or agent, and completing application forms, is available online. For more information on SBA's Surety Bond Guarantee Program, including Surety Office contacts, go online to http://www.sba.gov/osg/, or call 1-800-U-ASK-SBA.
Release Number: 14-04
SOURCE U.S. Small Business Administration