The program provides assistance much the same as the SBA Loan Guarantee Program, to small businesses that have annual sales of less than $6,500,000 averaged over 3 years. The SBA will participate with a surety on Contract sizes up to $2,000,000.
The process for a business, is to begin by contacting an agent/surety that participates in the program and provide the required information to an underwriter for determining the following:
- Does the small business qualify for SBA Assistance?
- What additional information is needed to complete an underwriting file?
- Is the information in a format (financial statements) that is acceptable to the surety/SBA?
- Will the principal's experience be adequate to support the request bond or surety program?
- What bank support is available to the business?
- The specific information needed to complete an underwriting file?
- Depending on the type and size of bonds required of the business, any special information that might be needed to supplement the application;
Upon receipt, the agent/surety will provide the business with access to the SBA web site with the process to requesting specific bonds.
The time required from start to actually receiving a bond will depend on the quality and completeness of information but normally, shouldn't take over 3-5 working days after a complete file is submitted.
The bond cost is based on performance and payment bonds (no cost for bid bonds) and consists of two charges;
- SBA requires a check in the amount of $7.29/thousand of the contract amount; If the contract is $100,000, this check would be in the amount of $729.
- The surety's premium is $25 per thousand of contract amount on the first $500,000 of contract and $15/$1,000, thereafter;
To get started, please select your companies normal job size category from the Contract Bonds Tab and complete an SBA Form 912 for each owner, officer, director and an SBA Form 994 from the link below. http://www.sba.gov/aboutsba/sbaprograms/osg/osgforms/index.html.
Once we've established a program for your firm, you'll be provided "Login" information, for submitting future bond requests online.
All fees are due prior to issuing the performance and payment bonds. |
