The moment has finally arrived; the Small Business Administration is pushing enhancements to their struggling bond program. The improvements are small, but it’s a step in the right direction.
In case you don’t know what the SBA Bond Program is all about, it’s a government run bond program that specializes in bid, payment, and performance bonds for contracts up to $2 million for small and emerging contractors who have trouble acquiring bonds through standard surety markets. Unfortunately, with the difficult procedures to go through when trying to work with them, many avoid the program.
The SBA wants to employ a streamlined application process for the Prior Approval Program for contracts $250,000 and under. The SBA is proposing a new form, the Quick Bond Guarantee Application and Agreement, SBA Form 990A, which will merge two of the forms now used in the bond program. The proposed SBA Form 990A aids in the goal of streamlining the bond application for smaller contract amounts. Also included in this proposed rule, the SBA will no longer ask the principal to complete two other forms for smaller contract amounts, including SBA Form 994F (Schedule of Work in Process), and SBA Form 413, (Personal Financial Statement). The new SBA Form 990A will assess the risk by asking the Principal to submit a list of the three largest jobs completed in the last 5 years.
The shedding of paperwork will not only make principals happy, but also surety companies who tend to avoid the bond program because of its current cumbersome process. The proposed streamlined application process is intended to increase participation by not only small contractors, but sureties as well who would in turn provide more bonding opportunities and jobs for the little guys.