SBA Surety Bond Guarantee Program

Surety Bond Professionals is a family-owned and operated bonding agency with over 75 years of experience. With access to a broad range of surety markets, our SBA Authorized Surety Agents are ready to assist you with securing a bond backed by the SBA Surety Bond Guarantee Program.

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Learn more about the SBA Surety Bond Guarantee program or contact our SBA Authorized Surety Agents for assistance with any questions you may have.

Approved to offer SBA guaranteed bonds through the SBA’s Surety Bond Guarantee Program.

The Small Business Administration (SBA) doesn’t issue surety bonds. Rather, it provides a guarantee that makes it possible for qualified small businesses to obtain surety bonds that they might not otherwise be approved for. This program can potentially allow a contractor to achieve larger limits than they might qualify for in the standard markets or become bonded for the first time and “open the doors to bonding.”

The SBA Surety Bond Guarantee (SBG) Program was established in 1971 to support small businesses that might otherwise struggle to obtain surety bonds due to limited financial resources, credit history, or experience.

Bonding is often a barrier for small contractors trying to secure government and private contracts, so the Small Business Administration (SBA) began this program to provide a federal guarantee that reduces risk for surety companies.

The Surety Bond Guarantee Program has helped thousands of small businesses get the bonding they need over the years by ensuring a portion of the bond amount—between 70% and 90%. SBA has also expanded into:

  • Contract Bonds: for federal, state, and local projects.
  • Quick Application Processes: for contracts up to $400,000 through the SBA’s QuickApp Program.
  • An Increase in Guarantee Limits: to provide more flexibility for small businesses in securing larger contracts.
To qualify for assistance from the SBA Surety Bond Guarantee Program, a business must meet certain criteria related to:

  • Business size. Applicants must meet the SBA’s definition of a small business.
  • Type of surety bond sought. Only contract bonds such as bid bonds, performance bonds, and payment bonds are guaranteed. License bonds are not eligible.
  • Contract size. Non-federal contracts for less than $9 million and federal contracts up to $14 million qualify for an SBA guarantee.
  • Underwriting standards. Applicants must meet the SBA’s underwriting standards for credit, capacity, and character
The SBA Surety Bond Guarantee Program works with the surety companies by guaranteeing a portion of the bond on behalf of the surety company. This allows bonding companies to provide support for tougher-to-write cases, and to increase bonding capacity for small businesses.

Applications to the SBA for a surety bond guarantee are submitted by either the bonding company or agent rather than by the small business directly. If an application is approved, the surety company gains the confidence to issue a surety bond.

Contact one of our SBA Authorized Surety Agents today to discuss your bonding needs.
The surety bond agreement for a contract bond guaranteed by the SBA is a legally binding contract among three parties. The “obligee” is the private or government project owner (or general contractor) requiring the contract bond, not the SBA.

When a claim is filed against a contract bond backed by the SBA Bond Guarantee Program, the process is the same as with any other surety bond claim: the bonding company (the “surety”) makes sure the claim is valid, pays it on behalf of the bonded business (the “principal”), then collects reimbursement from the principal.

The only difference with an SBA-guaranteed bond is that the SBA covers much of the principal’s debt to the surety (80-90%) if the principal does not reimburse the surety in full.
  1. Step 1: Determine Eligibility – Use the SBA website to check if your business meets the SBA size standards and your contract value aligns with the program's limits.
  2. Step 2: Prepare Documentation – Gather together all of the essential documents, such as financial statements, project details, and work experience.
  3. Step 3: Contact an SBA-Authorized Surety Agent – Contact Surety Bond Professionals to speak to an agent who can help you with your application.
  4. Step 4: Submit the Application – Complete and submit SBA Form 994 through your agent.
  5. Step 5: Underwriting & Approval – From here, the SBA and surety agency will review your application.
The principal pays a premium for the contract bond that is only a small percentage of the bond’s penal sum. The surety assigns the principal a premium rate that is based on its underwriters’ assessment of the risk involved. Underwriters will review the principal’s personal credit score, personal finances, business finances, and industry experience. The more creditworthy the surety’s underwriters believe the principal is, the lower the premium rate.

In addition to the bond premium, the principal must pay the SBA a small flat fee (currently 0.6%).

Below are some of the surety bonds that the SBA Surety Bond Guarantee Program can help you secure through a surety agency:

1. Bid Bonds

A bid bond makes sure contractors follow through on their bids, preventing project owners from wasting time and money if the bidder backs out later. By compensating project owners for the expenses associated with restarting the bidding process, it safeguards the owner's financial position.

2. Performance Bonds

A performance bond guarantees that the contractor will complete the project as agreed. Private owners are increasingly using these bonds to safeguard investments and prevent financial loss.

3. Payment Bonds

Payment bonds guarantee the contractor will pay all laborers, material suppliers, and contractors per the agreements made.

4. Maintenance Bonds (Warranty Bonds)

Maintenance bonds, also called warranty bonds, protect the project owner from financial harm in the case that defects appear once the project is complete.

5. Supply Bonds

Supply bonds guarantee that materials are delivered in a timely manner per the contract. However, they do not cover labor or installation costs.

SBA has a wealth of information available to help contractors understand, apply for, and secure a bond backed by the SBA Surety Bond Guarantee Program. One such resource is the webinar they host.

Through SBA-hosted webinars, contractors can learn how the program works, who qualifies, and how to apply. These sessions provide valuable insights into bonding requirements, the application process, and strategies to improve eligibility.

[Apply for the Webinar]

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Our surety bond professionals will help you get the construction bonds you need through the SBA Surety Bond Guarantee Program with the largest single/aggregate capacity and best terms possible.

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