SBA SURETY BONDS STAFF:

Small Business Administration

Office of Surety Guarantees

409 Third Street S.W.

Suite 8600

Washington, D.C. 20416

Phone: (202) 205-6540

TTY/TTD: 800-877-8339

 

WEBSITE: https://www.sba.gov/surety-bonds">https://www.sba.gov/surety-bonds">https://www.sba.gov/surety-bonds  

 

 

Washington, D.C. Headquarters 

 Pam Swilling

Customer Relations

(202) 205-6546

pam.swilling@sba.gov

Serving Businesses in:

Alabama

Connecticut

Delaware

District of Columbia

Kentucky

Maine

Maryland

Massachusetts

Mississippi

New Hampshire

New York

Rhode Island

Tennessee

Vermont

Virginia

West Virginia

 

 

 

 

Denver Area Office

Jennifer I. Vigil

Area Office Director

721 19th Street, Suite 426

Denver, CO 80202

(303) 927-3489

jennifer.vigil@sba.gov

Serving Businesses in:

Colorado

Illinois

Indiana

Iowa

Kansas

Michigan

Minnesota

Missouri

Montana

Nebraska

New Jersey

North Dakota

Ohio

Pennsylvania

South Dakota

Utah

Wisconsin

Wyoming

Puerto Rico

Virgin Islands

 

 

 

 

Seattle Area Office 

 

Catharine Powers

Acting Area Office Director

2401 4th Avenue, Suite 450

Seattle, WA 98121

(206) 553-8541

catharine.powers@sba.gov

Serving Businesses in:

Alaska

Arkansas

Arizona

California

Florida

Georgia

Hawaii

Idaho

Louisiana

Nevada

New Mexico

North Carolina

Oklahoma

Oregon

South Carolina

Texas

Washington

Guam

 
 

  

 

Surety Bonds: Explained

Contractors obtain surety bonds from surety companies or agents representing surety companies. Most public construction contracts and many private contracts require one, so if you’re a construction or service contractor bidding on a project, you’ll probably need a surety bond.

SBA guarantees bid, performance and payment bonds issued by surety companies. This Federal guarantee encourages surety companies to bond small businesses who are having difficulty obtaining bonding on their own.

Surety Bonds: The Basics:

What is a Surety Bond?

A surety bond ensures contract completion in the event of contractor default. A project owner (called an obligee) seeks a contractor (called a principal) to fulfill a contract. The contractor obtains a surety bond from a surety company. If the contractor defaults, the surety company is obligated to find another contractor to complete the contract or compensate the project owner for the financial loss incurred.

There are four types of surety bonds:

1. Bid Bond: Ensures the bidder on a contract will enter into the contract and furnish the required payment and performance bonds if awarded the contract.


2. Payment Bond: Ensures suppliers and subcontractors are paid for work performed under the contract.


3. Performance Bond: Ensures the contract will be completed in accordance with the terms and conditions of the contract.


4. Ancillary Bond: Ensures requirements integral to the contract, but not directly performance related, are performed.

When do I need a surety bond?

Any Federal construction contract valued at $150,000 or more requires a surety bond when bidding or as a condition of contract award. Most state and municipal governments as well as private entities have similar requirements. Many service contracts, and occasionally supply contracts, also require surety bonds.

What is SBA’s role?

The mission of the Office of Surety Guarantees is to provide and manage surety bond guarantees for qualified small and emerging businesses, in direct partnership with surety companies.

SBA helps small contractors by guaranteeing bid, performance, and payment bonds issued by participating surety companies for contracts up to $6.5 million. SBA can guarantee a bond for a contract up to $10 million if a Federal contracting officer certifies that SBA's guarantee is necessary for the small business to obtain bonding.

Are there fees for SBA bond guarantees?

SBA charges the small business 0.729% of the contract price for a payment or performance bond. There is no charge for a bid bond. SBA charges the surety company 26% of the fee the surety company charges the small business.

Prior Approval Program

In this program, all bond guarantee applications are submitted to SBA for prior review and approval. SBA guarantees 90 percent of the losses incurred on 1) contracts up to $100,000, and 2) on contracts awarded to the following types of businesses:

• Socially">http://www.sba.gov/content/disadvantaged-businesses">Socially and economically disadvantaged small businesses


• Historically">http://www.sba.gov/category/navigation-structure/contracting/working-with-government/small-business-certifications-au-0">Historically Underutilized Business Zones (HUBZone) Program small businesses


• 8(a)">http://www.sba.gov/content/8a-business-development-0">8(a) Business Development Program small businesses


• Veteran">http://www.sba.gov/content/veteran-service-disabled-veteran-owned">Veteran or Service-Disabled">http://www.sba.gov/content/service-disabled-veteran-owned-small-business-concerns-sdvosbc">Service-Disabled Veteran-Owned small businesses

SBA offers an 80% guarantee on bonds for all other individual contracts up to $6.5 million in value or up to the $10 million if a Federal Contracting Officer certifies that SBA’s guarantee is necessary for the small business to obtain bonding.

Quick Bond Application for Prior Approval Program

The Quick Bond Guarantee Application and Agreement is for contracts valued at $250,000 or less, and combines the contractor application and SBA’s agreement with the surety to guarantee the bond into one easy-to-use form. The form, the Quick Bond Guarantee Application and Agreement (SBA Form 990A), is">http://www.sba.gov/sites/default/files/files/SBA%20Form%20990A%20Quick%20Bond%20non%20fillable.pdf">is available here.

This streamlined application significantly reduces paperwork for both contractors and surety companies participating in SBA's Prior Approval Program and reduces processing time.

Learn more about how contractors">https://www.sba.gov/content/contractors">contractors can apply to the Prior Approval Program.

Preferred Program

The Preferred Program enables sureties to issue, monitor, and service bonds without prior approval by SBA. The guarantee rate is 70%.

Please note that SBA does not directly bond a contractor. Instead, SBA guarantees bonds issued by a surety company in order to encourage the surety company to provide bonds to small businesses. Find out how contractors can apply to the Preferred Program.

For more information about either the Prior Approval or Preferred program, please contact SBA’s Office of Surety Guarantees in Washington, D.C. at (202) 205-6540.

 

 

Participating Prior Approval Surety Companies

 

AA Plus Bonding Services LLC

860-470-3344

jwagner@aaplusbonding.com  

 

Accredited Surety Agency LLC

610-849-0772

gfendler@accreditedsuretyllc.com

 

Acrisure, LLC dba Smith Manus

502-238-1228

dneichter@smithmanus.com

 

Agents of Insurance

605-348-7788

deanat@agentsins.com

 

Alamo Surety Bonds

210-930-5550

 jim@alamobonds.com

 

Allstar Surety Company, Inc.

303-694-4404

spauger@allstarfg.com

 

Alter Surety Group, Inc.

305-517-3798

 warren@altersurety.com

 

American Surety Bonds Agency, LLC

404-486-2355

snewberry@suretybondsagency.com

 

Anglo-Puerto Rican Insurance Corporation

787-474-4900

jsantiago@anglo-antilles.com

 

Assurance Brokers, LTD

618-692-9800

ralph@assurancebrokers.com

 

Atlantic Underwriting Agency, Inc.

610-397-0570

nancy@aubond.com

 

BB&T Boyle Vaughan Insurance

803-231-6182

bpulliam@bbandt.com

 

BDH Associates, Inc.

770-564-2999

bpulliam@bbandt.com

 

Baldwin-Cox Agency, LLC

972-331-3725

russ@baldwinagency.com

 

Barbour Group, LLC

410-876-9610

snash@thebarbourgroup.com

 

BaySide Surety Brokerage, Inc.

251-661-0745

dcampbell@baysidesurety.com

 

Boley-Featherston-Huffman & Deal Company

800-234-1167

robbie.martin@boleyfeatherston.com

 

Bond Pro Services LLC

314-863-5535

ralph@bondproservices.com

 

Bond Specialist Insurance dba Marcia Smith Surety Insurance

760-564-1551

bond.specialist@verizon.net

 

BondPro, Inc.

918-337-4100

dave@thebondpro.com

 

Bonding & Insurance Solutions, LLC

816-944-2233

nikki.johnson@bondingsolutionsllc.com

 

Bonds Southeast, Inc.

615-321-9700

phil@bondssoutheast.com

Bowen, Miclette & Britt of Florida, Inc.

407-647-1616

jcongelio@bmbinc.com

 

Box Bonding Agency, LLC

817-865-1515

steven@boxbonding.com

 

Brown & Brown of Pennsylvania, LP

484-567-0150

hlindsay@bbofpa.com

 

Brunswick Companies

330-864-8800

mlevinsonr@brunswickcompanies.com

 

CB Insurance, LLC

719-477-4278

jason.yezek@centralbancorp.com

 

CCI Surety, Inc.

813-443-2174

bquiri@ccisurety.com

 

CCI Surety, Inc.

602-396-7533

ebaker@ccisurety.com

 

CCI Surety, Inc.

866-317-3294

jcrawford@ccisurety.com

 

CHS Insurance Services, LLC

800-548-1494

brian.herrera@chsinc.com

 

CJS Bonds, LLC

720-236-8245

charles@cjsbonds.com

 

Calwest Surety & Insurance Services, Inc.

714-784-0053

frank@calwestsurety.com

 

Canaan Insurance Agency

818-599-7555

canaan@canaaninsuranceagency.com

 

Capital Insurance and Bonding Services

540-521-2128

melissa@mycibs.com

 

Capstone Brokerage, Inc.

702-227-5727

alicia@capstone1.com

 

Cecil W. Powell & Company

904-353-3181

bpowell@cwpowellins.com

 

Centaur Insurance Services

516-792-3944

eposses@centaurinsurance.com

 

Centennial Surety Associates, Inc.

410-888-9110

cseed@centennialsurety.com

 

Certified Insurance Services

435-586-2211

loric@certifiedinsurance.net

 

Charles L . Crane Agency

314-206-4118

terrih@craneagency.com

 

Cobb, Strecker, Dunphy and Zimmerman, Inc.

801-537-7467

gdotson@csdz.com

 

Commercial Surety Bond Agency

714-516-9563

shaunna@commercialsurety.com

 

Commercial West Insurance Agency

505-255-9577

j.sisk@cwinsure.com

Community Insurance Center, a division of Agency: Inner-City Underwriting Agency Inc.

312-341-9080 x203

j.sisk@cwinsure.com

 

Construction Bonds, Inc.

703-934-1000

joshua@sbabonds.com

 

Contractors Best Insurance Services, Inc.

818-340-4900

shilo.losino@contractorsbestins.com

 

Contractors Bonding of the South, LLC

770-476-9062

regina@cbots.net

 

Creative Insurance Concepts, Inc. dba Creative Bonding & Insurance Solutions (CA)

804-674-8330

cjreynolds@creativeic.com

 

Dealey, Renton & Associates

714-824-3902

jgurrola@dealeyrenton.com

 

Dean Insurance Agency

801-763-1313

wdean@deanins.net

 

Delmarva Surety Associates, Inc.

410-561-3593

cjudge@delmarvasurety.com

 

Direct Insurance Services, Inc.

435-628-9228

dana@stgeorgeinsurance.com

 

Dixie Leavitt Ageny

435-238-7613

shauna-johnson@leavitt.com

 

East Coast Surety Solutions, LLC

757-513-4247

jhassani@ecsurety.com

Eastern Insurance Group, LLC

800-333-7234

eyoung@easterninsurance.com

 

Eils & Associates Insurance Group; dba: EA Insurance

913-486-7319

dustin@eainsure.com

 

Engle-Hambright & Davies, Inc.

717-394-5681

kalantz@ehd-ins.com

 

FSB Agency, Inc.

954-323-3587

gladys@fsbagencyinc.com

 

Fisher Brown Bottrell Insurance Company

850-432-7474

ewonders@fbbins.com

 

Florida Surety Bonds, Inc.

888-786-2663

jeff@floridasuretybonds.com

 

Freedom Bonding, Inc.

410-922-2221

markcongdon@freedombondinginc.com

 

Gibson Insurance Agency, Inc.

574-245-3592

nbicknell@gibsonins.com

 

Guignard Company

407-834-0022

margie@guignardcompany.com

 

HMS Insurance Associates, Inc.

410-337-9755

bfrancik@hmsia.com

 

HUB International

915-206-6055

paul.gilcrease@hubinternational.com

 

 

Harris Madden Powell Stallings & Brown, Inc.

901-853-5300

jmccoy@hmpins.com

 

Heacock Insurance

863-385-5171

mburton@heacock.com

 

Holmes Murphy & Associates, Inc.

214-265-6326

jkirk@holmesmurphy.com

 

Hub International Insurance Services

310-568-7632

jennifer.green@hubinternational.com

 

Hub International Insurance Services

303-893-0300

hubcoloradodistribution@hubinternational.com

 

Huntington Insurance, Inc.

614-899-8508

denise.nelson@huntington.com

 

 IFB INsurance Services, LLC

718-413-7352

mwhite@ifbinsurance.com

 

IMA, Inc.

316-267-9221

bret.burton@imacorp.com

 

InfiniTeam Insurance, Inc.

801-619-6288

ryan.gardner@infteam.com

 

Inland Insurance Inc.

509-456-2648

charla.boadle@inlandins.com

 

Integrated Insurance Solutions, Inc.

801-487-3000

barb.shelton@integratedslc.com

 

Integrity Surety, LLC

800-592-8662

kara@integritysurety.com

 

1. L. Hubbard Insurance and Bonds Agency, Inc.

217-877-3344

ballison@jlhubbard.com

 

J.M. Wilson Corporation

866-881-8318

skuykendall@jmwilson.com

 

JAZ Bond & Insurance Services, Inc.

818-998-9529

james@jazbond.com

 

James A. Scott & Son dba Scott Insurance

804-545-2200

jroberts@scottins.com

 

James P. Reagan Agency, Inc

315-673-5334

jesse.champagne@reagancompanies.com

 

John Hackney Agency of Rocky Mount, Inc.

252-442-3186

trhodes@jharm.com

 

KOG International, Inc.

610-399-4080

bruce@kogbonds.com

Keystone Bonding & Surety Agency LLC

570-473-2712

lmantle@keystoneinsgrp.com

 

Leavitt Insurance & Central Bond Services, Inc.

801-798-7343

robyn-jensen@leavitt.com

 

Lesron Insurance Agency, Inc

916-481-8108

sandy@lesronsac.com

 

M & T Insurance Agency Inc.

856-985-2087

krowe@mtb.com

 

Mapes Insurance Agency, Inc.

616-453-8600

vgiuliano@mapesinsurance.com

 

Marsh & McLennan Agency

914-397-1600

kathie.scarberry@mma-mw.com

 

Marsh & McLennan Agency

757-491-1100

kathie.scarberry@mma-mw.com

 

Mayfair Insurance Agency dba Oakland Insurance Agency Inc.

248-647-2500

kreilly@oaklandinsurance.com

 

McGriff, Seibels & Williams, Inc.

205-581-9208

rfreel@mcgriff.com

 

Meybohm Scarborough Insurance LLC dba MAI Risk Advisor

706-722-8338

alicia@mairiskadvisors.com

 

Moore Surety Bonds Agency

317-966-0544

devinmoore@moorebonds.com

 

Mullis Newby Hurst LP

972-201-0134

frogers@mnhtullis.com

 

National Surety Services, Inc.

770-394-9444

michael@nationalsurety.com

 

Newton Surety Services, LLC dba: Newton Bonding

651-342-1480

nick@newtonbonding.com

 

Nielson, Hoover and Company

407-330-3990

kmessel@nielsonbonds.com

 

Omaha Business Insurance Solutions

402-884-5797

freddie.brown@omahabusinessinsurance.com

 

PCL Insurance Agency, Inc.

972-459-4749

bondrequest@pclbonds.com

 

Patriot Risk & Insurance Service

949-486-7917

ssalandi@patrisk.com

 

PayneWest Insurance, Inc.

406-556-4619

relliott@paynewest.com

 

Performance Bonding Surety & Insurance Brokerage LP

714-338-3942

jen@performancebonding.com

 

Pinnacle Surety & Insurance Services, Inc.

714-546-5100

vanessa@pinnaclesurety.com

 

Pippel Insurance Agency, INC

907-745-3261

colleen@insuranceladyak.com

 

Pope & Young Bonding & Insurance Services, Inc.

559-323-8091

dennis@popeyoungbonds.com

 

Preferred Bonding Services

323-663-7814

pattyz@preferredbonding.com

 

Price and Price Enterprises Inc.

516-295-6081

jwprice@melwainbonds.com

 

R.T. Thomas & Co., Inc. DBA Bond Pro Insurance Brokers

636-220-6377

ralph@bpibrokers.com

 

Reed Surety & Insurance Services, Inc.

714-389-6797

kevin@reedsurety.com

 

Robert E. Miller Insurance Agency

816-333-3000

benw@millercares.com

 

Roger Bouchard Insurance

727-447-6481

bonds@bouchardinsurance.com

 

Rudnik Surety, Inc.

763-786-9666

bondorder@rudniksurety.com

 

Sandra Kay James

818-577-3282

sandrajames@sandrajamesbonding.com

 

Shorewest Surety Services, Inc.

262-884-6590

dan@shorewestsurety.com

 

Sierra Surety Insurance Service

916-765-9474

greggfranks@sierrabonds.com

 

Southwest Bond Services, Inc.

623-974-6453

jenna@bondwriter.com

 

Surety Bond Associates

610-617-1052

denice.franzone@suretybondassociates.com

Surety Bond Girls, LLC

678-694-1967

traci@suretybondgirls.com

Surety Bond Professionals, Inc.

781-559-0568

mark@suretybondprofessionals.com

 

Surety Bonds & Insurance Agency, Inc. DBA D&M Surety

419-350-2221

gayle@suretybnds.com

 

Surety One, Inc.

800-373-2804

cpoindexter@suretyone.org

 

Surety Placement Services, LLC

480-419-2456

mrunde@suretyplace.com

 

Surety Solutions Insurance Services

916-737-5723

ryan@surety1.com

 

Surety Support Services Inc

866-385-7760

info@suretyss.com

 

The Bond Exchange and Insurance Agency

949-461-7000

jen@performancebonding.com

 

The Bond Exchange, Inc.

704-366-6847

jessica.griffin@bondexchange.com

 

The Bond Exchange, Inc.

501-224-8895

info@thebondexchange.com

 

The Fedeli Group

216-643-6987

kkeller@thefedeligroup.com

 

The Financial Center, Inc.

901-334-1283

ronald@thefinancialcentertn.com

 

The Mahoney Group

702-997-6292

dfykes@mahoneygroup.com

 

The Stoll Agency, Inc.

215-822-2427

mstoll@stollagency.com

 

Thomas Sauer Bond Agency

866-288-3856

shari@tsballc.com

 

Tonry Insurance Group

617-773-9200

rcorner@tonry.com

 

Truss, LLC

913-643-4177

ebenton@trussadvantage.com

 

Turner Surety and Insurance Brokerage, Inc.

714-955-4032

awaterbury@tsibinc.com

 

USI Southwest, Inc.

512-651-4172

courtney.goulding@usi.com

 

Unique Surety and Insurance Services, LLC

561-429-3600 x1001

courtney.goulding@usi.com

Valenti Trobec Chandler Inc.

248-888-5486

ssmall@gswins.com

 

Valley Surety Insurance Agency

916-567-6676

shirley@valleysurety.com

 

Viking Bond Service, Inc.

623-518-2982

cynthia@vikingbond.com

 

Wells Fargo Insurance Services USA, Inc.

303-863-6503

philip.monasch@wellsfargo.com

 

Eligibility Requirements for Small Business Contractors

To be eligible for a surety bond guarantee:

• Your business must be classified as small. The business combined with its affiliates must not exceed the size standard designated for the primary industry of the business together with its affiliates. Use">http://www.sba.gov/size-standards-tool?ms=tid157">Use the Size Standards tool to determine if your business is classified as small.


• You must need an SBA guarantee to obtain a bond.


• The size of the public or private contract or subcontract must not exceed $6.5 million or $10 million if a Federal contracting officer certifies that SBA’s guarantee is necessary to obtain bonding


• Your business must satisfy credit, capacity and character evaluations completed by the surety company or an agency representing the surety company.


• There must be a reasonable expectation of successful contract performance.


• The contract must require a bond.

How to Apply for a Surety Bond

1. To apply for a surety bond, you must first choose a surety company or bonding agent who represents a participating surety company. View a list of participating Prior">http://www.sba.gov/content/prior-approval-surety-companies">Prior Approval Surety Companies, Preferred">http://www.sba.gov/content/preferred-surety-bond-participants">Preferred Surety Companies and Agents.
">http://web.sba.gov/orasbgpub/dsp_welcome.cfm">Agents.

2. You must then complete the surety’s application and provide the necessary credit, capacity, and character information. The surety or agent will underwrite the application and decide whether to issue the bond, and whether an SBA guarantee is required.

Prior Approval Program: If the surety company requires an SBA guarantee as a condition of issuing the bond, you can submit applications by paper or online through the E-App system. The SBA forms listed below must be printed and signed even if you are applying online.

• SBA">http://www.sba.gov/sites/default/files/files/SBA%20Form%20990A%20Quick%20Bond%20non%20fillable.pdf">SBA Form 990A – Quick Bond Guarantee Application and Agreement


• SBA">http://www.sba.gov/content/application-surety-bond-guarantee-assistance">SBA Form 994 – Application for Surety Bond Guarantee Assistance


• SBA">http://www.sba.gov/content/surety-bond-guarantee-agreement-addendum">SBA Form 991 – Surety Bond Guarantee Addendum


• SBA">http://www.sba.gov/content/statement-personal-history">SBA Form 912 – Statement of Personal History


• SBA">http://www.sba.gov/content/schedule-work-process">SBA Form 994F – Schedule of Work in Process


• SBA">http://www.sba.gov/content/personal-financial-statement">SBA Form 413 – Personal Financial Statement

About the E-App System

The online surety bond application system, or">https://eweb.sba.gov/gls/dsp_login.cfm">or E-App, will automatically prompt you to print, sign and mail the required forms to your surety company or agent. Follow the steps below to use E-App.

1. To access E-App, you must register for an account in the SBA’s">https://caweb.sba.gov/cls/dsp_login.cfm">SBA’s Capital Access Login System (CALS), which is the login point for all SBA services. After you have completed and submitted the information on the Login Information screen, you will be emailed your ID and a default password.


2. The first time you log into the system – “Choose Function” screen using the default password, the Change Password screen will appear. Use this screen to select a permanent user password of your choice.


3. On the General Login System – Choose Function screen, select “Surety Bond Guarantee Applications,” and follow the instructions on the screen to complete and submit your first application.

For more information on how to apply online, view the">http://www.sba.gov/sites/default/files/Contractor_Small%20Business_User%20Manual.pdf">the contractor’s user’s manual or application">http://www.sba.gov/sites/default/files/E_Application_Training%20Slides_Contractors.pdf">application training tutorial. You can also call SBA’s Office of Surety Guarantees in Washington, D.C. at (202) 205-6540 or 800-877-8339.

Preferred Program

Follow the steps below to apply for the Preferred Program.

1. To apply for any SBA surety bond guarantee, you must first choose a surety company in the Preferred Program.


2. The application process under the Preferred Program is paper only. You can contact the Preferred Program surety that you select to discuss application requirements. The surety will underwrite the application and decide whether to execute the bond and whether an SBA guarantee is required.


3. Complete the required forms below and mail them to the Preferred surety company:

• SBA">http://www.sba.gov/content/application-surety-bond-guarantee-assistance">SBA Form 994 – Application for Surety Bond Guarantee Assistance


• SBA">http://www.sba.gov/content/surety-bond-guarantee-agreement-addendum">SBA Form 991 – Surety Bond Guarantee Addendum


• SBA">http://www.sba.gov/content/statement-personal-history">SBA Form 912 – Statement of Personal History


• SBA">http://www.sba.gov/content/schedule-work-process">SBA Form 994F – Schedule of Work in Process


• SBA">http://www.sba.gov/content/personal-financial-statement">SBA Form 413 – Personal Financial Statement

For Surety Companies and Agents

Prior Approval surety companies must comply with all requirements contained in 13 CFR Part 115, Subparts A and B. Preferred surety companies must comply with all requirements contained in 13 CFR Part 115, Subparts A and C.

Among other requirements, a surety company must: (1) be a corporation approved by the U.S. Department of the Treasury to issue bonds in connection with Federal contracts (13 CFR 115.11); (2) not sell or transfer its files or accounts unless it has obtained SBA’s prior, written approval [this provision does not apply to the sale of an entire business division, subsidiary or operation of the surety (13 CFR 115.12(f))]; (3) the Surety must agree to use standards generally accepted by the surety industry in underwriting bond applications [these standards must be used on both SBA and non-SBA guaranteed bonds (13 CFR 115.15(a))]; and (4) not charge a bond premium in excess of that authorized by the applicable State insurance department, nor impose any non-premium fee unless such a fee is permitted by applicable State law and approved by SBA (13 CFR 115.32(a) and 13 CFR 115.60(a)(2)).

Additional requirements for Preferred Surety companies include, among others: (1) the Surety must have an underwriting limitation of at least $2 million, as cited on the U.S. Treasury Department list of acceptable surety companies (13 CFR 115.60(a)(1)); (2) the Surety may have premium income from contract bonds guaranteed by any government agency (Federal, state or local) of no more than one quarter of the total contract bond premium income of the Surety (13 CFR 115.60(a)(3)); (3) the vesting of underwriting authority for SBA guaranteed bonds is limited to employees of the Surety (13 CFR 115.60(4)); and (4) the vesting of final settlement authority for claims and recovery under the program is limited to employees of the Surety’s permanent claims department. (13 CFR 115.60(5))

Application Requirements and Procedures to Become a Participating Surety

Applications for SBA’s Surety Bond Guarantee Program must include the following information:

1. Identification of the corporate entity that is applying for participation in the SBG Program, names and titles of key executives, and points of contact responsible for the management and administration of its programs.


2. A summary statement describing any ongoing or planned mergers, acquisitions or other changes in organizational structure or key management positions that may influence participation and performance in the program. Include a company organizational chart.


3. A narrative summary addressing the following:

• Summary of why the applicant wants to participate in the SBG Program.


• Projected annual SBA bond activity, to include the number of bonds and total dollar value for each of the first three years of program participation.

1. Applicant performance over each of the past three years to include:

• Number of bonds issued and total dollar value.


• Number of contract defaults and the total dollar value.


• Total dollar value of recoveries for each year.

1. Narrative summary of the standards, processes, and procedures for underwriting. Include a copy of manual(s) with applications.


2. Narrative summary of standards, processes and procedures for administering and paying claims, and submitting claim reimbursement requests to the Small Business Administration. Include a copy of manual(s) with application.

Please submit all application information to the following address:

Small Business Administration

Office of Surety Guarantees

Attn: Ms. Tesha Williams

409 Third Street S.W.

Suite 8600

Washington, D.C. 20416

 

How Prior Approval Surety Companies and Agents Submit Bond Guarantee Applications through the E-App System

Prior Approval sureties or their agents can submit applications electronically through the E-App">https://eweb.sba.gov/gls/dsp_login.cfm">E-App System by following the steps below:

1. To use the E-App, you must have an account for SBA’s">https://caweb.sba.gov/cls/dsp_login.cfm">SBA’s Capital Access Login System (CALS),which is the single login point for all SBA services. To obtain an account, you must first be authorized by a surety company to obligate the company in the E-app system and issue bonds on its behalf. SBA’s Office of Surety Guarantees needs written confirmation from each surety company for which you have been authorized to write bonds. (E-App">http://www.sba.gov/sites/default/files/E-App%20Access%20Application%20Documents.pdf">(E-App Access Application)

Please send confirmation letters to the following address:

Small Business Administration

Office of Surety Guarantees

409 Third Street S.W.

Suite 8600

Washington, D.C. 20416

 

After we receive confirmation, we will send you an Electronic Data Certification, which must be signed, notarized and returned to the address above.

1. You will then be contacted by the OSG Security Administrator to complete the setup of your account. Once the profile information has been submitted and approved, you will receive an e-mail with your ID and a default password.


2. The first time you">https://eweb.sba.gov/gls/dsp_login.cfm">you log into the SBA’s Capital Access Login System (CALS) – “Choose Function” screen using the default password, the Change Password screen will appear. Use this screen to select a user password of your choice.


3. On the General Login System – Choose Function screen, select the Surety Bond Guarantee applications to begin using the system to enter and/or submit Surety Bond Applications.

Required Surety Forms for Prior Approval Program

In addition to the">http://www.sba.gov/content/bond-guarantee-application-forms">the required contractor forms, the following Prior Approval Surety Company forms are required:

• Form">http://www.sba.gov/content/surety-bond-guarantee-agreement">Form 990 – Surety Bond Guarantee Agreement
  The Surety Company or agent is required to print, sign and mail the original 990, Surety Bond Guarantee Agreement, to the Denver or Seattle Area Office. If it is for a final bond, it must be accompanied by the contractor’s fee check or the contractor’s fee must be paid electronically using Pay.gov.


• Form">http://www.sba.gov/content/surety-bond-guarantee-underwriting-review">Form 944B – Surety Bond Guarantee Underwriting Review
  If a Prior Approval application is submitted through the E-App system, a paper copy of the 994B is not required.

Surety Bond Guarantee Program – SOP 50 45 3

Download">https://www.sba.gov/sites/default/files/files/SOP_50433_The_Surety_Bond_Program.pdf">Download and read the SOP 50 45 3 to learn more about how to apply for SBA bond guarantees.  The guide is customized for surety agents.

Agent User’s Manual for E-App

Download">http://www.sba.gov/sites/default/files/Agent%20User's%20Manual.pdf">Download and read the Agent’s User’s Manual to learn more about the E-App system, which enables surety agents to enter surety bond guarantee applications, complete required forms and forward information to SBA.

How Preferred Sureties Submit Bond Guarantee Applications

In the Preferred Program, prior SBA approval of bond guarantees is not required. Preferred sureties, however, must notify SBA electronically of all bonds issued. For all final bonds, Preferred Program sureties report and submit to SBA all contractor and surety fees due via a monthly invoice.

Required Forms for the Preferred Program Only

• SBA">http://www.sba.gov/content/statement-personal-history">SBA Form 912 – Statement of Personal History


• SBA">http://www.sba.gov/content/surety-bond-guarantee-agreement-addendum">SBA Form 991 – Surety Bond Guarantee Addendum


• SBA">http://www.sba.gov/content/application-surety-bond-guarantee-assistance">SBA Form 994 – Application for Surety Bond Guarantee Assistance


• SBA">http://www.sba.gov/content/schedule-work-process">SBA Form 994F – Schedule of Work in Process


• SBA">http://www.sba.gov/content/personal-financial-statement">SBA Form 413 – Personal Financial Statement

Additional Help

For more information, contact SBA’s Office of Surety Guarantees in Washington, D.C. at (202) 205-6540 or 800-877-8339.

Bond Guarantee Forms for the Prior Approval Program are listed below.

Small Business Forms

• SBA">http://www.sba.gov/content/personal-financial-statement">SBA Form 413 – Personal Financial Statement


• SBA">http://www.sba.gov/content/statement-personal-history">SBA Form 912 – Statement of Personal History


• SBA">http://www.sba.gov/content/surety-bond-guarantee-agreement-addendum">SBA Form 991 – Surety Bond Guarantee Addendum


• SBA">http://www.sba.gov/content/application-surety-bond-guarantee-assistance">SBA Form 994 – Application for Surety Bond Guarantee Assistance


• SBA">http://www.sba.gov/content/schedule-work-process">SBA Form 994F – Schedule of Work in Process


• SBA">http://www.sba.gov/sites/default/files/files/SBA%20Form%20990A%20Quick%20Bond%20non%20fillable.pdf">SBA Form 990A – Quick Bond Guarantee Application and Agreement

Surety/Agent Forms

• SBA">http://www.sba.gov/content/surety-bond-guarantee-agreement">SBA Form 990 – Surety Bond Guarantee Agreement


• SBA">http://www.sba.gov/content/surety-bond-guarantee-underwriting-review">SBA Form 994B – Surety Bond Guarantee Underwriting Review


• SBA">http://www.sba.gov/sites/default/files/files/SBA%20Form%20990A%20Quick%20Bond%20non%20fillable.pdf">SBA Form 990A – Quick Bond Guarantee Application and Agreement

Additional Surety Forms

• SBA">http://www.sba.gov/content/surety-bond-guarantee-program-default-report-claim-reimbursement-and-record-administrative-action">SBA Form 994H – Default Report, Claim for Reimbursement and Record of Administrative Action (for Prior Approval Sureties only)


• SBA">http://www.sba.gov/content/certification-regarding-debarment-suspension-and-other-responsibility-matters-primary-covered-transactions">SBA 1623 – Certification Regarding Debarment, Suspension and Other Responsibility Matters Primary Covered Transactions

Bond Guarantee Forms for the Preferred Program

• SBA">http://www.sba.gov/content/statement-personal-history">SBA Form 912 – Statement of Personal History


• SBA">http://www.sba.gov/content/surety-bond-guarantee-agreement-addendum">SBA Form 991 – Surety Bond Guarantee Addendum


• SBA">http://www.sba.gov/content/application-surety-bond-guarantee-assistance">SBA Form 994 – Application for Surety Bond Guarantee Assistance


• SBA">http://www.sba.gov/content/schedule-work-process">SBA Form 994F – Schedule of Work in Process

Frequently Asked Questions

1. What is a Surety Bond?

A surety bond is a written agreement between a Surety Company and the Contractor, or Principal that helps protect the project owner, or Obligee, in the event the Contractor fails to successfully perform the contract. If the Contractor fails to perform, the Surety Company assists the Obligee in completing the contract.

 

All Federal construction contracts greater than $150,000 require a surety bond as a condition of contract award. Very often, the Contractor must provide a “bid” bond in order to bid on a Federal contract. The bid bond tells the Project Owner that if the contract is awarded to the contractor, the contractor will be able to obtain a “performance” bond. So, there are generally two types of bonds, a bid bond when submitting a bid on a project, and a performance/payment, or final bond, that is required for contract award.

 

1. How does a Small Business apply for a bond?

Any business, large or small, must apply for a bond with a Surety Company or an agent that is authorized to represent the Surety Company. The business is then evaluated as part of an underwriting process that assesses such business attributes as character, capability and capacity. The purpose of underwriting is to gauge the likelihood that the contractor will successfully perform the contract.

 

View a list of Surety Companies, or search the SBA Surety Bond Guarantee System to find Agents empowered to represent participating surety companies.

 

1. How does the SBA Surety Bond Guarantee Program help a Small Business obtain bonding?

 During the underwriting process, a Surety Company or an Agent may find that the small business presents a degree of risk beyond that which the Company or Agent is willing to assume without the SBA Guarantee. For example, a small business may have limited working capital or lack evidence of prior, successful contract performance that causes concern. Under the Surety Bond Guarantee Program, SBA guarantees between 70 and 90% of the losses and expenses incurred by the Surety Company should the small business default and fail to complete the contract. This Government guarantee encourages the Surety Company to issue a bond that it would otherwise not issue to a small business.

 

1. What is the underwriting process?

The underwriting process assesses the contractor’s capability and capacity to perform the contract, as well as the contractor’s character. The purpose of underwriting is to determine whether there is a reasonable expectation that the contractor can successfully complete the contract.

 

Among other areas addressed during the underwriting process with a Surety Company or Agent are the following:

1. personal financial status of the business owners/IRS tax forms, etc.


2. company financial status / balance sheet and income statement. [CPA prepared statements may be required, depending on the quality of statements prepared in-house, and the size of the prospective contract.]


3. bank & credit information


4. a schedule of contracts on hand and the stage of completion


5. resumes of key business owners


6. a business plan

 

The Surety Company or Agent may decline to issue a bond without an SBA guarantee. If, however, the Surety Company applies to SBA for the bond guarantee, completion of the following forms is necessary:

1. SBA Form 994, Application for Surety Bond Guarantee Assistance


2. SBA Form 912, Statement of Personal History


3. SBA Form 994F, Schedule of Work In Process

 

1. Does SBA issue bonds?

No. SBA does not issue bonds. SBA guarantees bonds issued by participating surety companies.

 

1. What types of businesses are eligible to participate in SBA’s Surety Bond Guarantee program?

Generally, all small businesses, whether they are sole proprietorships, partnerships, or corporations, are eligible to participate.

 

 

1. What is the maximum contract size that can be considered for an SBA bond guarantee?

 Individual public and private contracts and subcontracts of $6.5 million or less are eligible. SBA can guarantee a bond for a contract up to $10 million if a Federal contracting officer certifies that SBA’s guarantee is necessary for the small business to obtain bonding. There is no limit to the number of bonds that can be guaranteed for any one contractor.

 

 

1. May I change agents and/or surety companies?

SBA does not designate a particular agent or surety company for a small contractor. The small contractor is free to change agents or sureties.

 

1. My business is incorporated in one State, but most of my work is done in another. Which SBA office would handle my application?

 The application is handled by the SBA Area Office that services the State where your business is located. Only applications in the Prior Approval Program must be reviewed and approved by SBA.

 

1. Do I have to be an 8(a) contractor to participate?

No. You do not have to be a participant in 8(a) to participate in the Program.

 

1. May I obtain an SBA bond guarantee even though I am not a U.S. citizen?

Yes, but you must be a legal alien bearing a registration card that entitles you to work in the United States.

 

1. May I obtain an SBA guarantee even if I have been bonded before without one?

 Yes. If a contractor is unable to obtain a bond on reasonable terms and conditions, an SBA guarantee may be provided. Please note, a contractor must not obtain some bonded work without an SBA guarantee and other work with the SBA guarantee. All bonded work must be SBA guaranteed.

 

1. What are my costs for obtaining an SBA bond guarantee?

All final bond (Payment/Performance) applications require you to pay a fee amounting to .729% of the contract price. If for some reason the bond is cancelled or not issued, the guarantee fee will be returned. SBA does not charge a contractor for bid bond guarantees.

 

1. How long does it take for SBA to process an application?

Generally, it takes only three to five days to process an application.

 

1. May I contact SBA regarding the status of my application?

Since SBA’s contractual relationship is with the surety, SBA does not interact directly with contractors. You must contact your agent or surety to find out the status of your application.

 

1. How long can I participate in the program?

There is no limit on the length of time a contractor may participate, but the goal is to help contractors become bondable without SBA assistance.

 

1. May I use both the Prior Approval and PSB programs to get an SBA guarantee?

 Yes. You are free to choose from either program in order to obtain an SBA guarantee.

 

 

 

 

 

 

 

 

                                                                                                                        UPDATED: 8.2018