The U.S. Small Business Administration has more than tripled the eligible contract amount for surety bond guarantees, enabling smaller firms to go after larger public and private contracts.
The new limit of $6.5 million, up from $2 million, will aid small businesses in the construction and service industries secure the bonding necessary to guarantee their work and compete for contracts alongside larger firms that have less trouble securing bonding.
The new limit came from the 2013 National Defense Authorization Act, designed to bolster participation by surety companies in the SBA program.
In addition to the new limit for public and private contracts, the SBA can guarantee bonds up to $10 million for government contracts if a federal agency certifies the guarantee is necessary for the small business to obtain bonding.
The SBA program is a partnership with the surety industry where SBA guarantees 70 percent to 90 percent of the bond amount if a contractor defaults or fails to perform.
