By Nick Newton for AssuredPartners
Anyone working in the construction bond industry has seen the scenario where a client or prospect is requesting bonding capacity larger than the standard surety market is willing to provide. While some sureties will utilize tools like escrow or collateral, the SBA Bond Guarantee Program offers an alternative solution, enabling greatly increased capacity for your client.
The SBA guarantees 80% of the bond obligation to the surety; 90% for firms that are minority-owned, veteran-owned, and service-disabled veteran-owned, 8(a) and HUBZone certified, and all contracts $100,000 or less. This reduced exposure makes it more palatable for the 42 sureties that participate in the program to offer increased bonding capacity.
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