SBA bond maximum increased to $2 million

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In an effort to broaden contracting opportunities for small, minority and women contractors, the U.S. Small Business Administration has increased the maximum size of the surety bonds it can guarantee for small businesses.|ret||ret||tab|

According to an SBA news release, recent statutory changes to SBA's Surety Bond Guarantee Program now allow guarantees on bonds up to a maximum of $2 million, up from $1.25 million, for small and emerging contractors who cannot obtain surety bonds through regular commercial channels.|ret||ret||tab|

Robert J. Moffitt, associate administrator of SBA's Office of Surety Guarantees, said, "Small businesses rely on this program to allow them to compete for construction and service contracts. In the tough competition for contracts, the SBA's surety bond program can mean the difference between success and failure for thousands of small contractors without the resources to qualify for surety bonds on their own."|ret||ret||tab|

Changes to the Surety Bond Guarantee Program were signed into law on December 21, 2000. The changes were in the reauthorization bill, PL 106-554.|ret||ret||tab|

According to the SBA, contractors served by the Surety Bond Guarantee Program typically lack the required combination of experience and financial strength needed to secure bonds through regular surety channels. They do, however, possess the knowledge, ability and potential to become viable, successful firms that contribute significantly to the economy.|ret||ret||tab|

By making surety bonds available to qualified and deserving companies, the program ensures competitiveness and fairness in the construction industry. As a result, contracts are let at the best possible prices, and savings are created on contracts awarded to these small businesses. Since its inception, the Surety Bond Guarantee Program has produced more than $1 billion in savings to federal, state and local governments, and to private project owners.|ret||ret||tab|

This cost-effective assistance is produced at little or no cost to the taxpayers. |ret||ret||tab|

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