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Submitting an Application
The contractor chooses a participating surety company and applies for a specific bond through a bonding agent who represents that surety. The application provides the background, credit and financial information required by the surety company and the SBA. Contact your SBA district office for a list of local surety agents who can provide the forms required by the SBA.

Once the surety company receives its completed forms and sufficient underwriting information from the applicant, it processes and underwrites the application and decides whether to:

  • execute the bond without the SBA’s guarantee,
  • execute it only with the SBA’s guarantee, or
  • decline the bond even with the SBA’s guarantee.

If surety in the Prior Approval Program determines that the SBA must guarantee the bond, it submits an underwriting review, guarantee agreement, supporting documents, and the contractor’s application forms to the SBA. If the application is for a final bond, the contractor’s guarantee fee check is also attached.

A surety in the Preferred Surety Bond Program may issue the bond without the SBA’s approval. The surety must then report the bond to the SBA and forward the contractor’s fee payment within the required time.

Application Review
In the Prior Approval Program, the SBA reviews the information, documentation and underwriting rationale of the surety company to determine if the application is eligible for the program. If it is, and the information submitted by the surety company appears favorable, the SBA guarantees the bond (the SBA may also request additional information).

The SBA charges fees to both the contractor and the surety company; rates are published periodically in the Federal Register. The SBA does not charge the contractor a fee for an application or a bidbond guarantee.

When the bond is issued, the contractor pays the surety company’s bond premium. This charge cannot exceed the level approved by the state in which the bond is issued.



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