What are the Types of Surety bonds?

The three most common types of surety bonds are: Bid Bonds Performance Bonds Payment Bonds

Are Surety Bonds paid monthly?

No. You don't pay month-to-month for sureties. When you are quoted a price for a surety bond, you make a one-time payment.

How do I apply for a surety bond?

Applying for a surety bond, no matter the sort of bond, is to contact a surety agency. For instance, you can reach CSBA here to get started on obtaining your surety bond.

What is a payment bond?

A payment bond ensures that all of a contractor’s laborers, subcontractors, and suppliers are paid on a particular project.

Who requires payment bonds?

Payment bonds are required on almost all public projects. General contractors sometimes require them of their subcontractors, and occasionally private owners will require them.

Who pays for a payment bond?

The contractor, or principal, purchases the bond and pays for it.

Do Payment bonds expire?

Payment bonds expire after the project is completed and statutory timeframe have lapsed.

What is the difference between a surety bond and a payment bond?

A payment bond is a type of surety bond. The only real difference is the qualifying term, in this case, it's "payment" and only notes what sort of surety bond it is.

What does a performance bond cover?

The performance bond covers the owner of the project against losses if the contractor fails to deliver on the project within the contractual provisions.

How long does a performance bond last?

Since performance bonds guarantee the completion of the contract, they last until the project is finished along with any required warranty period included in the agreement.

When can you release a performance bond?

Usually, a performance bond is released when the project is completed, though some public projects stipulate that a contractor gives a warranty following completion that the performance bond covers.

What is the difference between a performance and a payment bond?

We have a detailed article that explains the differences here , but the short answer is that the performance bond secures the contractor's promise to complete a job within the terms and conditions outlined at the agreed price while the payment bond protects subcontractors, vendors, and laborers against nonpayment.

What is the difference between a bid bond and a performance bond?

Bid bonds are required when contractors bid a project and guarantees if they are low bidder, they will enter into the contract and provide any required performance and payment bonds. Performance bonds guarantee the actual performance of the work to be completed by the contractor according to the terms of the agreement. What happens to a bid bond after a contract is signed? The bid bond is replaced by a performance bond if the bid is accepted and the contractor enters into a contract with the owner or general contractor.

California SBA Surety Bond Experts

We at CSBA pride ourselves on being experts in surety bonds and bonding programs, helping California contractors gain access to the surety bonds they need while guiding them through bonding programs to give them a leg up in their business.

You Build California, We Build Your Bonding Capacity

The Small Business Administration (SBA) bonding program helps smaller contractors that are not likely to be approved by a standard surety bond company obtain the bonding capacity they need to pursue government contracts at the federal, state, and local levels. The program provides a way for contractors to get past the typical barriers for increasing their bonding capacity and building their business. CSBA has worked with the SBA program since 1984, and our mission is to help the next generation of contractors grow.

What Makes CSBA Different?

Increase Your Bonding Capacity

To grow your business, you have to grow your bonding capacity and that is our entire expertise. Partner with a team that knows how to successfully do both.

Same Day
Review

Waiting time can cost you bids. We guarantee to review your application the same day we receive it.

SBA Bond Guarantee Program Experts

Designed by the Small Business Administration (SBA) to increase participation in government contracting, the SBA program enables contractors to get larger bonding capacity than they can through standard sureties. Contact one of our experts to see if it’s right for you.

Bonds Up To $750K with Good Credit. No Financials.

Have good credit and are looking for a bond under $750k? CSBA can get you same-day approval with a simple one-page application.

Simple In-House Underwriting

Our in-house underwriting team has the authority to approve bonds up to $2 million. This means you deal with the decision-makers directly reducing the back-and-forth, so we can get you bonded right away.

Represent 35 Different Surety Companies

We have access to more surety companies than other agents do, and more sureties equal better options to meet your goals.

Read About People We’ve Helped

The team at CSBA are rockstars. When I started my business, they helped me get my controller, CPA, and accounting system in place, and then set a gameplan to help me grow. Just a little over a year, they were able to get me approved for a $10 million bond. If you want to grow your business, you need to call these guys.

I was with one of those surety bond brokers out of the area and struggling to increase my bonding capacity beyond $1 million. CSBA met with me to learn about my business, and guided me on steps to take to get my bonding levels up. 18 months later, CSBA got me approved for a $6.5 million project.

The bonding capacity that CSBA has negotiated for Slater Builders has allowed us to pursue increasingly larger opportunities and strategically build our business. CSBA Is always professional, knowledgeable, and willing to put in the extra mile to ensure a smooth process.

CSBA showed tremendous trust in our team and our vision back in 2015 we were just a startup company. They are always willing to listen and help guide us as we continue to grow our company. CSBA is one of our most trustworthy professional advisors for critical business decisions, and we would not be the company we are today if it were not for CSBA.

How Does the Surety Bond Program Work?

The SBA bond guarantees to surety companies that when they write bonds for contractors who are in the program, the administration will pay up to 90% of the losses incurred on the bonds. Reducing the liability for surety companies creates less risk and enables them to issue the surety bonds needed to contractors who would not otherwise qualify.

To qualify for the SBA’s program, a contractor must contact a surety agent that has access to surety companies that participate in the program.

The application process itself is quite similar to applying for any other bond program, but with an additional application to be completed for the SBA. To successfully enter the program, a contractor must qualify as a small business according to the SBA’s size standards.

The contractor must also perform at least 15% of the work themselves and certify that they are not debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from transactions with any federal department or agency presently.

SBA Surety Bond Testimonial

Buhler Commercial

“I started my general contracting company in 2015.” Steve Buhler recalled. “I was doing mostly private work, but I wanted to get into public work ...

What is the Cost of the Bond Program?

A traditional premium for a surety bond contract is between 1-3% of the contract amount, but the SBA charges an additional fee of 0.6% of the bond amount on top of the premium charged. The SBA fee is due before the bond can be issued. To apply to the program, there is no charge, nor for bid bonds.

Download the SBA Surety Bond Program Guide

It’s a big misconception that the program is only available to newer contractors, but that isn’t true. To better help contractors in California learn all the options available to them through the SBA bond program, we’ve put together a comprehensive guide that can be downloaded.

Experience the
CSBA Difference

For over 35-years, California contractors have partnered with us and benefited from our expert surety bond services. When you partner with CSBA, you not only receive competitive rates on construction bonds but an entire suite of business services geared to help you succeed.

Fill out the form and let us help you achieve your bonding needs.

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California SBA Surety Bond Experts

You Build California, We Build Your Bonding Capacity