SBA Bond Guarantee Increased by 20%

Small businesses will have more contracting opportunities beginning in fiscal year 2017 thanks to a law President Obama signed recently that increases the maximum Small Business Administration surety bond guarantee percentage by 20%. The President signed the National Defense Authorization Act of Fiscal Year 2016 on Nov. 25, 2015. Among other changes, the Act increases the maximum guarantee percentage in the SBA Preferred Surety Bond (PSB) Program from 70 percent to 90 percent. "This is the first significant legislative change to the surety bond guarantee program in several decades. It will provide increased incentives for surety bond companies and bond producers to participate in the program, which will expand contracting opportunities for small businesses across the country," said Frank Lalumiere, Surety Bond Guarantee Program Director at SBA. Surety bonds help contractors bid on projects, both private and public as they protect project owners in the event the contractor fails to successfully perform the contract. If the contractor fails to perform, the surety company assists the project owner in completing the contract. SBA does not provide direct surety bonds to small businesses; surety companies do. But through its Preferred Surety Bond program, the agency guarantees between 70 and 90% of the losses and expenses incurred by the surety company if the small business fails 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. In turn, with the backing of a surety bond, a small business contractor may bid on a project that otherwise it could not bid on. In the Inland Empire the Small Business Development provides existing and startup businesses with technical assistance to apply for SBA loans and to improve their competitive standing in the marketplace. "SBDC clients receive expert guidance and benefit from the experiences of staff and other businesses. The Inland Empire SBDC focuses on doing things that have positive impacts on the clients and the local economy," said Vincent McCoy executive director. With hundreds of workshops and thousands of hours in confidential, one-on-one, consulting sessions we help clients create viable business, long-term jobs and access more money to expand and start businesses that will last. Among the business topics SBDC delivers are: financing for existing and startups; business planning and development; marketing, social media and sales; government and corporate contracting. “Workshops and consulting services are offered throughout the Riverside and San Bernardino counties through our four offices and 8 outreach locations. Call upon us to help you achieve the success you deserve,” said McCoy. The Inland Empire Small Business Development Center is part of the Orange County / Inland Empire SBDC Network and is funded in part through a cooperative agreement with the U.S. Small Business Administration (SBA), California State University Fullerton and University Enterprise Corporation at California State University in San Bernardino and extended to the public on a non-discriminatory basis. For more information about the SBA Surety Bond Guarantee Program, visit https://www.sba.gov/surety-bonds or call the Inland Empire Small Business Development Center in Riverside at 3780 Market Street, Riverside CA 92501, phone (951) 781-2345, fax (909) 983-5515.