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What's New: Government Affairs

SBA Adopts Regulations Increasing Preferred Surety Bond Guarantee Sought by SFAA

Tuesday, August 22, 2017  
U.S. Small Business Administration Adopts Regulations Increasing Guarantee Amount for Preferred Surety Bond Guarantee Program 

The U.S. Small Business Administration (SBA) adopted revised regulations for the Bond Guarantee Program (BGP) that implement a recent change in the law to increase the guarantee percentage for the Preferred Surety Bond Guarantee Program (PSB) from not more than 70% to not more than 90% of the losses.  SFAA advocated for the change in the law and supported its implementation in our comments on the proposed rules.  SBA now will reimburse sureties participating in the PSB for the same amounts as set forth in the existing regulations for the Prior Approval program.  New sureties entering the PSB going forward also will need to obtain prior written approval for a guarantee on a surety bond for $2 million or more for the first nine months that they are in the PSB under the revised regulations.  The maximum amount of the bond eligible for the Quick Bond Guarantee Application program has been increased from $250,000 to $400,000.  SBA also changed the thresholds for Prior Approval Sureties for increases of the bond amount and contract amount that trigger notice requirements and requirements for SBA approval, which previously was an increase of $100,000 or 25% of the contract or bond amount, whichever is less.  The revised regulations changed the threshold to $500,000 or 25% of the original contract amount, whichever is less.

 

Members should visit Government Relations / General Info (Members) for more information.



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