SBA adds five surety partners: a contract-readiness guide for small businesses
SBA expanded its surety network in October. Here is what contractors and suppliers should verify about bond access, fees and readiness before bidding.
The development: more participating sureties, not automatic approval
The SBA announced on October 5, 2026 that five surety companies joined its Surety Bond Guarantee program during fiscal 2026: Merchants National Bonding Inc., United Fire & Casualty Company, RLI Insurance Company, Capitol Indemnity Corporation and Platte River Insurance Company. BGA checked the announcement and current program guidance on October 21. This is a follow-through guide to that announcement, not news that the program opened today.
The expansion gives eligible firms more participating surety options. It does not award a contract, promise bond approval or supply operating cash. For a contractor, fabricator or supplier, the practical question is whether bonding is the actual obstacle to a particular job—and whether the business can deliver that job if it wins.
Confirm the bond and program fit first
SBA’s current guidance covers contract bonds, not commercial bonds. Its guarantee supports participating sureties; firms must still meet applicable size standards and the surety’s credit, capacity and character review. The October announcement describes contracts up to $9 million and certain federal contracts up to $14 million with a contracting officer’s necessity certification. Confirm the applicable limit and conditions with an authorized agent.
Use SBA’s agency directory to begin a conversation in your state. A business in Delaware, the DMV or elsewhere should confirm the agent can handle its work and location. Being listed is a starting point, not BGA’s endorsement or proof that an agency has approved your project. Ask about the specific bond required in the solicitation, subcontract or customer agreement.
BGA’s first decision: is this a bonding problem or a delivery problem?
Before shopping for a bond, name the barrier in one sentence. “We have the crew and experience, but the buyer requires a performance bond” is different from “We need the contract payment to buy materials and have no funding plan.” The second statement describes a cash and delivery problem that bonding alone does not resolve.
Build a short job-readiness sheet with the proposed scope, start and completion dates, existing commitments, key suppliers, expected payment timing, and the person responsible for delivery. Mark uncertain figures as estimates. If a critical subcontractor, permit or material remains unconfirmed, identify who will verify it and by when. This sheet is BGA’s preparation framework, not an official SBA application checklist.
Ask an agent these questions before spending on a bid
Start with fit: Is this type of contract eligible for the SBA-backed route you offer? What information do you need to assess us and this project? What could prevent approval? Who issues the bond, and when would approval become final? Request a written list rather than assuming every participating surety uses identical requirements.
Then ask about timing and obligations: How much time should we allow before the buyer’s deadline? What premium, guarantee fee, collateral or indemnity terms may apply? Who must sign, and what continuing reporting is expected? What happens if the scope or contract amount changes? These are questions for the agent and your advisers; BGA has not reviewed an individual business’s proposed bond or agreement.
A cost example that does not pretend to be a quote
SBA’s program page lists a 0.6% guarantee fee on the contract price for performance and payment bond guarantees, with no SBA fee for bid bond guarantees. For illustration, 0.006 × a $300,000 contract equals $1,800. That is the illustrated SBA guarantee fee, not the all-in bond cost or an offer available to a particular applicant.
Ask the agent for a complete written cost breakdown, including any separate surety premium and other applicable charges. Avoid double-counting a fee already included in a quote. Verify when each payment is due, how changes affect it, and any cancellation or refund conditions before signing. A percentage from a public page is not enough to set a bid price.
Stress-test payment timing separately
Consider an entirely hypothetical $300,000 job that requires $45,000 of material and payroll outlays before the first customer payment arrives. The $45,000 is a planning assumption, not a typical industry requirement. If the firm cannot cover that gap, bond access does not fix it. Map expected cash outflows and customer receipts by week, then test a delayed-payment scenario.
Also ask what happens to your existing customers if this job uses the same crew or equipment. A larger awarded contract may require more supervision, coordination and cash than the headline value suggests. Compare the potential contribution after direct costs with the time, risk and capacity it consumes. Do not count the whole contract amount as profit or as cash already received.
The next step is a readiness conversation
Choose one suitable opportunity and use its actual documents to speak with an SBA-authorized agency. Bring your questions and a clear account of what your business has done, what it can deliver now and what remains uncertain. Do not misstate experience or hide existing commitments to make the application look stronger.
BGA’s procurement coverage distinguishes an opportunity from an award, and an award from completed and paid work. This network expansion may remove one barrier for some eligible firms. The useful outcome is a well-supported decision to bid, prepare further or pass—not simply a bigger pipeline of contracts the business cannot fulfill.