Per the Small Business Administration’s recent announcement, “Administrator Isabel Casillas Guzman, head of the U.S. Small Business Administration (SBA) and the voice in President Biden’s cabinet for America’s more than 33 million small businesses, announced that for the first time since 2013, the SBA is increasing the statutory contract limits for the Surety Bond Guarantee Program (SBG). This regulatory change is expected to increase revenue opportunities through contracting for small businesses, supporting job creation and economic growth. Effective March 18, the SBA will begin guaranteeing bid, performance, payment, and ancillary bonds up to $9 million for all projects and up to $14 million on federal contracts – up from $6.5 million and $10 million, respectively.”: (SBA Release, Feb. 2024)
Small enterprises and accompanying entrepreneurship are vital to the nation’s economy. President Biden has made his position on support for and encouragement of private businesses, especially in the construction sector are an imperative of his administration’s economic strategy. The SBA increases bond guarantee limits (i.e., surety bond guarantee program) have been changed to support that strategy. Per the Administration, “In 2021, Americans applied to start 5.4 million new businesses—more than 20 percent higher than any previous year on record and more than two-thirds higher than the annual average of 3.2 million new businesses applications per year in the five years prior to the start of the pandemic.” (WH Report, Apr. 2022) The report is good news for small business owners. The President’s Executive Order 14063 requiring Project Labor Agreements (PLAs) for most large-scale Federal construction projects, evidences the Administration’s commitment to construction firms.
The SBA’s increase in bond guarantee limits also clearly reflects the success of the bond guarantee program. The facts speak for themselves. Per the SBA, “In fiscal year 2023, the SBA guaranteed bid and final bonds totaling more than $7.3 billion in contract value. Over 1,800 small businesses received assistance through SBA’s surety partners and bonding agencies, and more than 37,000 jobs were supported by small businesses receiving SBA bond guarantees.: (SBA, Dec. 2023)
The increase is good news, as is the evident strength of the construction sector and the opportunities that it offers to emerging contractors that need that “extra edge” provided by the SBA’s support. SBA Increases Bond Guarantee Limits.
