Isabel Casillas Guzman, the Administrator of the U.S. Small Business Administration (SBA) and a key figure in President Biden’s cabinet representing over 33 million small businesses in America, revealed an update to the Surety Bond Guarantee Program (SBG).
This is the first adjustment to the statutory contract caps since 2013, a move anticipated to enhance small businesses’ access to revenue through contracts, thereby fostering job creation and economic expansion.
Starting 18 March, the SBA will extend its guarantee coverage to include bid, performance, payment, and ancillary bonds up to $9 million for general projects and to $14 million for federal contracts, an increase from the previous limits of $6.5 million and $10 million.
The SBA can also cover bonds exceeding $9 million on federal projects with the endorsement of a federal contracting officer or for projects situated in areas affected by major disasters.
Administrator Guzman said, “Surety bonds help small businesses win contracts by providing the customer with a government-backed guarantee that the work will be done.”
She further explained the role of the SBA in the context of the Biden-Harris Administration’s Investing in America initiative, which aims to channel unprecedented investment levels throughout the nation, stating, “the SBA remains committed to helping small businesses compete for and win these contracts.”
Katie Frost, the Associate Administrator for the Office of Capital Access, remarked on the timeliness of the program’s expansion, “This increase in the Surety Bond Guarantee Program comes at a critical time.” She linked the expansion to President Biden’s Investing in America agenda, which is designed to open up economic prospects for small businesses, noting that “surety bonds are an important component of accomplishing that work.”
The SBA’s efforts to assist small businesses extend to guaranteeing various types of bonds through participating surety companies.
Besides the enhanced contract bond guarantees, the SBA continues to streamline the bonding process for smaller contracts up to $500,000 through its QuickApp, which promises minimal paperwork and rapid approval times. Additionally, the SBA disclosed the 2023 rankings for Surety Companies and Agencies in December of the previous year.
