SBA Surety Bond Program Guide

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.


The SBA Surety Bond Program is a great help to contractors!

The SBA Surety Bond Program is a great help to contractors, both newer and more seasoned, increase their bonding capacity, but the program can also be intimidating to navigate and leave contractors confused as to how to successfully apply. That is why we’ve assembled this easy to navigate guide on the SBA program.

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Introduction to the SBA Surety Bond Program

Below you’ll find answers to commonly asked questions about the SBA’s bond program and articles that can help you with the process, as well as whether or not the SBA bond program is the right program for you.

Download the SBA Surety Bond Program Guide


What is the Small Business Administration?

The SBA program stands for Small Business Administration’s surety bond program and the administration itself is an independent agency of the federal government. The SBA was created to aid, counsel, assist and protect the interests of small businesses and was founded in 1953. In 1971, the Surety Bond Guarantee program was rolled out by the SBA and was designed to give small business contractors the means to bid on government contracts.

The SBA Surety Bond Program Explained

The SBA bonding program helps small contractors who are not likely to be approved by a surety bond company for a bond, which would prevent them from growing and securing government contracts at the federal, state, and local levels. The program provides a way for contractors who aren’t likely to secure a surety bond to obtain a bonding line for projects up to a certain amount. The SBA would guarantee to the surety company for up to 90% of the liability on the contract, making the contractor a lesser risk to the bond provider.

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 for them and they can 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, which are listed here: 

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.

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.

SBA Bond Tips for Contractors

With a qualified partner, like our surety experts at CSBA, the SBA bonding program can be a great help for both newer and more seasoned contractors. 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, we’ve assembled articles on various important topics relating to the SBA to help guide them.

Read through the articles below to gain information that can help you decide if the SBA bonding program is the right option for you or contact us to speak with a surety expert.

Contact Commercial Surety

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