The U.S. Small Business Administration announced recently that it is lowering its fees for Surety Bond Guarantees for the first time in 12 years.
The decrease will affect guaranteed bonds approved during fiscal 2019, from Oct. 1 through Sept. 30, 2019. The feel will shrink from 26 percent to 20 percent of the bond premium for small businesses and from $7.29 per $1,000 of the contract to $6 per $1,000 for contractors, the SBA said in a news release.
“With a booming economy growing at 4.2 percent and an increase in major construction projects throughout the country, this is welcome news for small contractors in New Jersey,” SBA New Jersey District Director Al Titone said in a prepared statement. “The reduction in the surety fee is the type of incentive that could spur more economic development and allow more contractors to participate in a greater number of construction projects within the state.”
Under the program, the SBA guarantees bid, payment and performance bonds for small and emerging contractors who cannot obtain such bonds through traditional channels.
“The program is currently outperforming its previous year results, yielding 27,000 jobs supported, 3,000 final bonds and $1.7 billion in final bond contract amounts in fiscal year 2018,” Titone said. “When the new fee structure goes into effect, we certainly expect to see a substantial increase in those numbers over the next year.”