How to get a Performance and Payment Bond
What is a Performance and Payment Bond?
Performance and Payment Bond are required on federal project because of the Miller Act. Enacted in 1935 the miller act requires that any contract that exceeds $100,000 and is for the construction, alteration or repair of any building or public work in the United States be bonded. On the state level, each state has their own law called the little Miller Act which requires Performance and Payment Bonds on state projects. Each state has their own threshold on the size of contract that requires a Performance and Payment Bond. Some states can be as low as $50,000 and others as high as $500,000.
When working with the SBA you will need to work with a surety company as well. Once the bond is approved the SBA guarantee goes to the surety not the contractor. It guarantees the surety that in the event of bond claim if the surety can’t recover their losses the SBA will cover anywhere from 70-90% of the loss.
Call us today as we are a register SBAs Bond agent and can help you get your bond approved.