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For small construction companies, obtaining bonding can be a daunting task. If you're having a hard time securing bid, performance or payment bonds, the U.S. Small Business Administration may have a solution.
The SBA's Surety Bond Guarantee program recently increased the guarantee limits for bonds to $6.5 million per project, for qualified contractors. The program may be a good option for construction businesses that lack either the contracting experience or the financial strength to get a bond directly from a surety company.
Historically, this program is vastly underused in Idaho. In the last 12 months, only four contractors in Idaho have participated. To put that in perspective, Idaho contractors used the program for a mere $322,000 of final bond guarantees, while our neighbors in Washington state had more than $7.6 million, and Oregon came in at more than $7.1 million in final bond guarantees.
SBA personnel describe a significant increase in activity due to the newer guarantee amounts. They describe an ideal situation as one where a contractor needs a $2 million to $3 million bid...