Tripled Biz Insurance Guarantee Helps Local Companies

Jane Sawyer, Hawaii District Director of the US Small Business Administration. Courtesy photo.

By Sonia Isotov

A major revision for US Small Business Administration’s surety bond program has reportedly more than tripled the eligible contract amount from $2 million to $6.5 million.

Local small businesses will now be able to secure larger private and public contracts with the help of the administration’s Surety Bond Guarantee (SBG) program.

The Hawaii SBA office is encouraging local small businesses to take advantage of the higher insurance guarantee limit and be eligible for larger contracts.

“This new, higher guarantee for the surety bond program is a very good tool for Hawaii’s small businesses that are demonstrating the capacity to work on larger contracts, but need the increased insurance coverage to secure the job,” said Jane Sawyer, the Hawaii district director of the administration.

The higher surety bond guarantee limits are expected to help construction and service sector small businesses gain greater access to private and public contracts and secure larger contracts vital to small business growth.

The construction and service sector industries will particularly benefit from the higher SBA surety bond ceiling. File photo.

The revisions are a result of the Fiscal Year 2013 National Defense Authorization Act and are expected to bolster participation by surety bond agents and brokers and their surety companies in the administration’s SBG program.

The changes also allow SBA to guarantee bonds for government contracts valued at up to $10 million if a contracting officer of a federal agency certifies that the guarantee is necessary for the small business to obtain bonding, and it is in the best interests of the government.

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 the participating surety company of between 70% and 90% of the bond amount if a contractor defaults or fails to perform.

For more information on SBA’s Surety Bond Guarantee Program, including Surety Office contacts, go online to http://www.sba.gov/osg/, or call 1-800-U-ASK-SBA.