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Bond Guarantees for Surety Companies

Published on AidPage by IDILOGIC on Jun 24, 2005

Administered by:

US Federal Government Agency (see all agencies)
Small Business Administration
CFDA #: 59.016

How to apply...

Application Procedure:

Small contractor must apply directly to a surety agent/broker for a surety bond. Surety agent/broker in turn acts for or contacts surety company to process the bond request. Under the Prior Approval Program, surety company deals directly with appropriate SBA Area Office regarding guarantee request. Area and district SBA offices also serve as contact points for program information purposes. PSB sureties deal directly with Headquarters.

Note: Each program will indicate whether applications are to be submitted to the Federal headquarters, regional or local office, or to a State or local government office.

Award Procedure:

Under the prior approval program, SBA notifies the surety company of SBA's approval of the requested guarantee and furnishes company with written authorization. Surety company (or agent/broker) notifies the bond applicant and issues bond. PSB sureties issue guaranteed bonds without SBA's prior approval and notify SBA on a monthly basis. Prior approval and PSB sureties remit 20 percent of their premium to SBA. Contractor pays fees of $6.00 per thousand dollars of contract value to SBA.

Note: Grant payments may be made by a letter of credit, advance by Treasury check, or reimbursement by Treasury check. Awards may be made by the headquarters office directly to the applicant, an agency field office, a regional office, or by an authorized county office. The assistance may pass through the initial applicant for further distribution by intermediate level applicants to groups or individuals in the private sector.