The SBA bond program by the numbers
A federal backstop, not a loan
The SBA Surety Bond Guarantee program works by sharing risk. The U.S. Small Business Administration promises to cover 80% to 90%of a surety's loss if a bonded contractor defaults. That guarantee lowers the surety's exposure enough that it can issue a normal bid, performance, or payment bond to a contractor it would otherwise decline. The SBA does not lend you money or issue the bond itself; it stands behind the surety.
Why that changes the math
Standard surety credit is hard to get when you are new, small, or have thin or challenged credit, because the surety carries the full risk. With the SBA covering most of a potential loss, a "no" often becomes a "yes." It is the same reason the program pairs so well with tools like funds control on tougher files.
What it covers, and the limits
- Bonds: bid, performance, payment, and certain ancillary bonds.
- Contract size: up to $9 million for any project, and up to $14 million on federal contracts when the contracting officer certifies the need.
- Guarantee level: 80% on most contracts, and 90% for smaller contracts and for disadvantaged, 8(a), HUBZone, and veteran-owned firms.
Who it is built for
New contractors with no track record, growing firms bidding bigger than their current line supports, and credit-challenged businesses. If a standard surety has turned you down, this is often the way in, and it is exactly the kind of file we specialize in. See how to get bonded through the SBA, or if you already have a specific job, read how to get a performance bond and start there.