Small Business Administration (SBA) Preferred Surety Bond Program
Through a broker partnership with SBA-authorized agency Foundation Surety & Insurance Solutions, Merchants Bonding Company™ supports small and diverse contractors who have the knowledge and skills necessary for success, but might not meet all of the criteria other sureties require.
Why Choose Merchants?
- Expertise - Merchants' sole focus on surety bonds, combined with our partnership with Peter Gibbs, former director of the SBA Office of Surety Guarantees, ensures that contractors will benefit from extensive knowledge and expertise.
- Ease - Peter will assist in working directly with contractors to complete the required SBA documentation, ensuring an accurate and efficient submission process.
- Speed - As an SBA Preferred Surety Partner, Merchants is one of the few markets issuing bonds without prior approval by the SBA so your experience will be easy, reliable and fast.
What Is A Surety Bond?
A surety bond is a three-party agreement that ensures the fulfillment of a commitment or contract. For instance, the surety (Merchants Bonding Company (Mutual)) may provide a surety bond to a construction company (the principal) which is required by the state (the obligee), ensuring the construction company will perform the duties as outlined in the contract. In bonding the construction company, Merchants assumes the risk should the company default or not fulfill their contract. A surety bond is different from traditional insurance in that the principal is obligated to pay back the surety company on any claims paid out.
What Is The SBA Surety Bond Guarantee Program?
The SBA Surety Bond Guarantee Program helps small and emerging contractors that might not meet all the criteria for bonds that sureties require. Through the Program, the SBA provides a guarantee to the surety, reducing the risk so that the surety is more willing to issue bonds to contractors that would otherwise not qualify.
Who Issues SBA Bonds?
SBA surety bonds are issued by surety companies through SBA-authorized surety agents. Merchants Bonding Company (Mutual) is an SBA Preferred Surety partner company.
How Do I Apply For A Bond Through The SBA?
Contact your local insurance agency to find out if they are an authorized SBA surety agency or
Foundation Surety & Insurance Solutions. They will guide you through the process, informing you of what documents and information are needed by the SBA and the surety company to underwrite your bond.
What Types of Contractors Could Benefit From Surety Bonds Through The SBA?
- Startups and firms in business less than three years
- Small businesses with limited capital
- Small businesses with internally prepared financial statements
- Small businesses that want to increase their surety capacity
What types Of Bonds Are Guaranteed By The SBA?
The SBA guarantees bid, performance, payment, and maintenance bonds.
- Up to $9 million for government and private sector contracts.
- Up to $14 million for federal contracts.
Peter C. Gibbs
President, Foundation Surety & Insurance Solutions
For more than 30 years, Peter C. Gibbs helped small and emerging businesses achieve their goals through programs developed by the Small Business Administration (SBA). With a strong focus in economic development, creation of wealth, and job opportunities in low-income geographic areas, Peter made a lasting impact on the U.S. economy while opening the doors to opportunity and prosperity. He is eager to contribute his expertise in the private sector and expand access to the programs he successfully launched for the SBA.