SBA’s Role

The SBA Office of Surety Guarantees (OSG) administers the SBG Program as a public-private partnership between the federal government and the surety industry.  The SBG program consists of the Prior Approval (Plan A) and the Preferred Surety Bond Program (PSB or Plan B) program.

Eligibility

In addition to the surety’s bonding qualifications, SBA’s eligibility requirements for applying for an SBA bond guarantee are:

• The contract must be $5 million or less and must require bonds
• The contractor’s business must be independently owned and operated and qualify as a small business under federal regulations

For all contracts, your company must meet the small business size standard for the North American Industry Classification System (NAICS) Code that the federal contracting officer specified for that procurement.

The SBA Guarantee

SBA reimburses a participating surety (within specified limits) for the losses incurred as a result of a contractor's default on a guaranteed bid bond, payment bond, performance bond or any bond that is ancillary with such a bond. 

How to Apply

The SBA does not directly bond the contractor.  The contractor chooses a bonding agent who represents an SBA surety participant.  The contractor completes the surety application and the required SBG forms, providing the agent with the required credit, capacity and character information.  The agent then underwrites the application and decides whether to execute with or without an SBA guarantee. Click on Area Office Contacts locate your state and contact that office.