Move Could Help Spur Much Needed Services and Construction Growth

Small businesses that need surety bonds to compete for construction and service contracts can qualify for U.S. Small Business Administration-backed surety bonds of up to $5 million.

The higher amount, a result of the Recovery Act, is more than double the previous $2 million maximum surety bond guaranteed by the SBA. Through the SBA’s Surety Bond Guarantee program, the SBA guarantees bid, payment and performance bonds. Surety bonds protect the project owner against financial loss if contractors default or fail to perform.

The SBA partners with the surety industry to help small businesses that would otherwise be unable to obtain bonding in the traditional commercial marketplace. Under the partnership, the SBA provides a guarantee to a participating surety company of between 70 and 90 percent of the bond amount. “During these difficult economic times,” said Acting SBA Administrator Darryl K. Hairston, “these changes are particularly helpful to small and emerging contractors who need access to surety bonds so they can bid on public construction and service projects.” HBM

http://www.sba.gov/osg/ or call 1-800-U ASK SBA.

Previously published in the August 2009 issue of HOME BUSINESS® Magazine, an international publication for the growing and dynamic home-based market. Available on newsstands, in bookstores and chain stores, and via subscriptions ($15.00 for 1 year, six issues). Visit www.homebusinessmag.com