🤔 What is Surety Bond Guarantee (SGB) Program? ExitCentre

Surety Bond Guarantee – Small Business Administration allows small business people to acquire surety bonds based on their performance, timely payments, and maintenance bonds. These safety bonds allow them to make payments on time to the dealers and help expand their businesses.

The program’s purpose is to provide funding to business people who own small businesses. The program helps increase surety bond capacity for growing contractors and makes surety credit to contractors who would otherwise not qualify for bonds in the market.

The program is a great initiative for non-standard contractors that consist of collateral or funds control. Insurance agents can also benefit from the program through Bond Exchange to expand their offering to contractors. In this article, all the necessary information will be provided in detail regarding the SPG program.

Benefits of the Surety Bond Guarantee Program

The program allows contractors to bid and undertake construction projects that they could not undertake based on their qualifications. For freshers in the construction field with little or no project experience, the program allows them to credit up to certain thousand dollars to grow their businesses.
For larger businesses, most companies require reviewed or audited financial statements with certain standards for credits, net worth, profitability, etc. The program helps in providing them assistance with the above-listed problems.
The program reduces the problem of financial review by allowing contractors to bid on projects that were difficult previously without the program.

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Qualification Criteria for the SGB Program

The program’s main aim is to help small contractors gain more government contracts. The program is only available to contractors who can only win a bidding contract with the help of this program. The SBA first verifies the following criteria while determining the eligibility of the constructor for the program:

The Necessity for a Bond

The contractor requires a bond as a prerequisite for bidding on or performing contract work.

Availability of a Bond

The contractor can only obtain a bond with the program’s help.

Subcontract

The contractor must be fully responsible for the management of all subcontracts. The contractor requires to finish at least 15% of the undertaken project.

Annual income

To qualify for the program, the contractors must have 30 million dollars or less in annual revenues, while trade contractors must have $10 million or less.

Moral Character

The program applicants must prove that they have a strong moral character to be eligible for help from SBA. The SBA will then verify factors such as the constructor’s criminal history and bond claims’ history. These are the important factors that are considered while determining the moral character of the constructor.

Capacity

The contractor must prove the company can successfully finish the project for which the bond is being applied. For qualifying this program, the contractor requires to complete the undertaken project to achieve the bond from SBA.

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How Do Contractors Apply for the SGB Program?

To apply for the program, contractors should contact a legal official of the administration, like Bond Exchange, to receive an application. After the contractor has finished filling in their details in the application and attested the required legal documents, the authorized official will determine whether the contractor’s eligibility is established for the program.

Suppose the contractor becomes successful in achieving the eligibility. In that case, the authorized official will then provide the bond, thus allowing the contractor to participate in the bidding process and begin work on the undertaken project by the contractor.

Conclusion

Overall, Surety Bond Guarantee Program is a great initiative Small Business Administration (SBA) took. The program focuses on helping small business owners by providing them with bonds and ensuring they manage to win a government project bid.

Business people should take advantage of this program and focus on expanding their business on a large scale. With the help of this program, people in business can also expand their network and also would get a chance to meet new people who are experts in this field.

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Frequently Asked Questions (FAQs)

What is Surety Bond Program?

Answer:- This is a program initiated by SBA to provide funding to people in business who own small businesses.

Is there any benefit for large businesses through this program?

Answer:- For larger businesses, most companies require reviewed or audited financial statements with certain standards for credits, net worth, profitability, etc. The program helps in providing them assistance with the above-listed problems.