---------- Forwarded message ----------
From: Sheila Williams <Sheila_Williams@kcmo.org>
Date: Fri, Mar 27, 2009 at 9:31 AM
From: Sheila Williams <Sheila_Williams@kcmo.org>
Date: Fri, Mar 27, 2009 at 9:31 AM
***********************************************
U.S. Small Business Administration
-- News Release --
***********************************************
Release Date: March 27, 2009
Contact: Dennis Byrne (202) 205-6567
Release Number: 09-19
Internet Address: http://www.sba.gov/news
Recovery Act More Than Doubles Surety Bond
Guarantee Ceiling for Small Businesses
Move Could Help Spur Much Needed Construction Growth
WASHINGTON – Effective today, small businesses that need surety bonds to
compete for construction and service contracts can qualify for U.S. Small
Business Administration-backed surety bonds of up to $5 million. The higher
amount, a result of the Recovery Act, is more than double the previous $2
million maximum surety bond guaranteed by SBA.
Through SBA's Surety Bond Guarantee program, SBA guarantees bid, payment
and performance bonds. Surety bonds protect the project owner against
financial loss if contractors default or fail to perform.
SBA partners with the surety industry to help small businesses that would
otherwise be unable to obtain bonding in the traditional commercial
marketplace. Under the partnership, SBA provides a guarantee to a
participating surety company of between 70 and 90 percent of the bond
amount.
"During these difficult economic times," said Acting SBA Administrator Darryl K.
Hairston, "these changes are particularly helpful to small and emerging
contractors who need access to surety bonds so they can bid on public
construction and service projects. These changes will support small and
emerging businesses nationwide, particularly construction contractors who
have seen their markets hurt by a poor economy and lagging construction
environment."
Additional program enhancements contained in the stimulus bill will be
announced soon in the Federal Register. Among these changes is a provision
that will allow SBA to guarantee a bond on a federal contract up to $10 million
following certification by the contracting officer that the bond guarantee is
required.
In recent years SBA has taken a number of steps to reinvigorate its Surety
Bond Guarantee Program and make it easier for small businesses to obtain
bonds. In 2007, SBA established a more flexible pricing structure, allowing
Preferred Surety Bond Sureties to charge current state rates rather than being
locked into rates that were established several years ago.
Industry associations have commended SBA for these new changes and SBA
continues to encourage surety bond providers and agents to actively
participate in the program.
In the past year, SBA also implemented a new electronic bond application
process. Small businesses and surety companies participating in the SBA prior
approval program are able to transmit application forms electronically to help
expedite review and approval processes. The SBA also re-engineered the
claims reimbursement process to shorten the cycle time between submission of
a claim for reimbursement by a surety company and payment by the
government.
SBA assistance in locating a participating surety company or agent and
completing application forms is available online. For more information on SBA's
Surety Bond Guarantee Program, go online to http://www.sba.gov/osg/ or call
1-800-U ASK SBA.
# # #
U.S. Small Business Administration
-- News Release --
***********************************************
Release Date: March 27, 2009
Contact: Dennis Byrne (202) 205-6567
Release Number: 09-19
Internet Address: http://www.sba.gov/news
Recovery Act More Than Doubles Surety Bond
Guarantee Ceiling for Small Businesses
Move Could Help Spur Much Needed Construction Growth
WASHINGTON – Effective today, small businesses that need surety bonds to
compete for construction and service contracts can qualify for U.S. Small
Business Administration-backed surety bonds of up to $5 million. The higher
amount, a result of the Recovery Act, is more than double the previous $2
million maximum surety bond guaranteed by SBA.
Through SBA's Surety Bond Guarantee program, SBA guarantees bid, payment
and performance bonds. Surety bonds protect the project owner against
financial loss if contractors default or fail to perform.
SBA partners with the surety industry to help small businesses that would
otherwise be unable to obtain bonding in the traditional commercial
marketplace. Under the partnership, SBA provides a guarantee to a
participating surety company of between 70 and 90 percent of the bond
amount.
"During these difficult economic times," said Acting SBA Administrator Darryl K.
Hairston, "these changes are particularly helpful to small and emerging
contractors who need access to surety bonds so they can bid on public
construction and service projects. These changes will support small and
emerging businesses nationwide, particularly construction contractors who
have seen their markets hurt by a poor economy and lagging construction
environment."
Additional program enhancements contained in the stimulus bill will be
announced soon in the Federal Register. Among these changes is a provision
that will allow SBA to guarantee a bond on a federal contract up to $10 million
following certification by the contracting officer that the bond guarantee is
required.
In recent years SBA has taken a number of steps to reinvigorate its Surety
Bond Guarantee Program and make it easier for small businesses to obtain
bonds. In 2007, SBA established a more flexible pricing structure, allowing
Preferred Surety Bond Sureties to charge current state rates rather than being
locked into rates that were established several years ago.
Industry associations have commended SBA for these new changes and SBA
continues to encourage surety bond providers and agents to actively
participate in the program.
In the past year, SBA also implemented a new electronic bond application
process. Small businesses and surety companies participating in the SBA prior
approval program are able to transmit application forms electronically to help
expedite review and approval processes. The SBA also re-engineered the
claims reimbursement process to shorten the cycle time between submission of
a claim for reimbursement by a surety company and payment by the
government.
SBA assistance in locating a participating surety company or agent and
completing application forms is available online. For more information on SBA's
Surety Bond Guarantee Program, go online to http://www.sba.gov/osg/ or call
1-800-U ASK SBA.
# # #
