The U.S. Small Business Administration announced the first fee decrease in Surety Bond Guarantees in 12 years.
The fee decrease will be in effect for guaranteed bonds approved during fiscal year 2019, taking effect Oct. 1, 2018 and ending Sept. 30, 2019, the agency confirmed.
The Surety Bond Guarantee (SBG) program is reducing the Surety fee from 26 percent to 20 percent of the bond premium charged to the small businesses and reducing its contractor fee from $7.29 per thousand dollars of the contract amount to $6 per thousand dollars of the contract amount.
“Reducing the SBG program fees will not only directly help small businesses, but also will incentivize surety companies and their agents to increase support for small businesses in the marketplace,” said Peter C. Gibbs, acting director of the Office of Surety Guarantees.
Under its SBG program, the SBA guarantees bid, payment and performance bonds for small and emerging contractors who cannot obtain surety bonds through regular commercial channels. SBA guarantees contracts up to $10 million, including the streamlined QuickApp application for those up to $400,000.
Currently, there are 34 participating sureties and more than 350 active agents in the SBG program. On average, completed surety bond applications are reviewed and processed in less than two days
“In Puerto Rico, Antilles Insurance is the only surety company licensed to provide surety bonds for small businesses with the SBA guarantee,” said SBA District Director Yvette T. Collazo.
“This reduction in the guarantee fee will help small businesses that would otherwise be unable to obtain bonding in the traditional commercial marketplace, obtain greater access to contracting opportunities,” she added.
The program is currently outperforming its previous year results yielding 27,000 jobs supported, 3,000 final bonds, and $1.7 billion in final bond contract amounts in fiscal year 2018.