Bond Program Description
The SBA Bond Program can help contractors looking to increase their bond program, specifically their single and aggregate bond limit. Some examples include,
- Using a 20X Working Capital multiple
- Bank Line of credit is counted towards your Working Capital
- They can consider Job Growth (over 2X largest job completed)
- Help stretching your backlog and consider more bonds at once.
- The program is perfect for first time bond users and new companies.
- More Flexible On Owners Personal Credit
Surety Underwriting Factors
- When working with the SBA we have to work with a Surety. The SBA approval goes to the surety not the contractor. It guarantees the surety 70%-90% of any potential loss.
- SBA will consider bid bonds, payment bonds and performance bonds.
Things To Consider
- There is an SBA Fee of .6% on top of the Surety bond rate.
- The SBA fee must be paid before any payment and performance bond can be issued.
- Must be current on all your taxes or at least have a payment plan with the IRS
- Can’t have a bankruptcy in the last 3 years and any bankruptcy must be discharged.
- A strong bond package!
- Contractors Questionnaire
- Five years of company yearend financials.
- Ideally prepared by a CPA
- If not prepared by a CPA, then a Balance Sheet and Income statement on an accrual basis.
- Current internal company financials. (balance sheet and income statement)
- Work on Hand Schedule
- Owners Personal Financial Statement
- Bank statements verifying company cash and bank line of credit.
- SBA Forms
- 994 (we will complete for your signature)
- 912 Statement of Personal History