SBA Bond Program Limits Increase

SBA Increases Project Size Limit to $10M – details:

Previous Maximum
$2M per project

New Maximum Project Size

$6.5M – On any bond, subject to normal underwriting consideration outlined in the previous SBA Guidelines
$10M – Possible on any bond, subject to normal underwriting consideration outlined in the previous SBA Guidelines and performed for a Federal Government Agency

Underwriting Authority

CCI Surety will continue to use our in-house underwriting authority to approve bonds and maximize our expertise working directly with the SBA Bond Guarantee program

Small contractors have varying levels of financial reporting and the SBA allows for varying levels of reporting based on contract size.
Financial Documents Required

Financial Year End (FYE) statement (prepared within 90 days)
Minimum 6-Month Interim statement

Minimum Financial Statement Requirements

Project Size FYE Interim

Up to $1.0M In-House In-House

$1.0M – $2.0M Compilation In-House
(One-time Only)**

$1.0M – $10.0M Review Compilation

*With Verification
**In-house interim financials potentially accepted once

Business Size
Allowable business sizes based on total sales and the number of employees are determined by NAICS code and vary depending on the type of business. Total sales can be as high as $33.5M in many cases.
SBA Paperwork The SBA has greatly reduced the amount of paperwork needed to utilize the program. In addition to our normal underwriting documents there are only Two 1-page SBA forms, that need to be filled out.

Negative or Insufficient Working Capital

Escrow Agreements/Funds Control + 5% Escrow Deposit The SBA recognizes the value of utilizing escrow agreements and funds control to potentially mitigate risk on projects. Utilizing an escrow agreement and funds control process in addition to a 5% deposit into the escrow account allows CCI to utilize the program even if the contractor has negative or insufficient working capital.
Additional Options Although not typically used, additional forms of collateral or other considerations such as third party indemnity can also be utilized to approve a contractor for the SBA.