SBA Bond Guarantee Program

The SBA Surety Bond Guarantee Program was developed to provide small, minority and disadvantaged contractors increased business opportunities. The Bond Guarantee Program is sponsored and endorsed by the U.S. Small Business Administration. When a contractor is approved into the Bond Guarantee Program their bonds are guaranteed to the surety supplying the bid, performance and payment bonds. In the event that the contractor defaults on a guaranteed bond the surety is reimbursed a specified percentage of the loss. The advantage to the contractor is that the surety is willing to take on a higher risk with the knowledge that any loss is minimized by the Federal guarantee. A high-risk contractor can fall into 3 main categories; financially troubled, start up company/ company new to bonding, or a contractor seeking larger bonds than their financial statement would allow in the standard market. The Bond Guarantee Program can guarantee a single bond up to $5,000,000 for qualified contractors. KOG International, Inc. utilizes the SBA program as a transitional step to the standard market. Our ultimate goal is to “graduate” a contractor out of the Bond Guarantee Program into a traditional bond line.

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