The Surety Bond Guarantee Program makes life easier for small construction businesses. Through the program, the SBA partners with surety companies to partially guarantee bonds. This reduces the risk for surety bond providers, making it easier for small businesses to attain bonds and compete for public projects. Last month, two facets of the program were adjusted to further benefit small construction businesses.

Bond assistance has been a hot item on the blog lately, namely in

 New Jersey, 

The bill, S-123/A-3559, calls for the New Jersey Economic Development Authority to establish the “Small Business Bonding Readiness Assistance Program.” As mentioned above, the program will aid small business that might be unfamiliar with the bonding process by guiding them through bonding requirements and educating these businesses on the process to obtain surety bonds.

The Small Business Bonding Readiness Assistance Program (SBBRAP) will do so though support programs and assistance including: improving small businesses’ financial presentation; helping to improve the businesses’ operational efficiency, profitability, and bonding capacity; and educating small businesses on the aspects surety bonding subject through workshops and consulting sessions

Specifics of the program have not quite been settled, but the New Jersey Economic Development Authority will be in charge of establishing the terms and conditions under which a business may apply for the program. The authority will also be in charge of establishing and maintaining the “Small Business Bonding Readiness Assistance Fund,” which will provide grant funding for small businesses participating in the program, as well as provide funds to SBBRAP for support services/ assistance and administration costs. The fund will be established with public funds as well as public and private donations.

Takeaway

This new legislation is great news for smaller contractors looking to work on public projects. While the prices of surety bonds on public projects may be going down in the future, that contractors will now have a tour guide to help them navigate the bond process will alleviate the administrative burden that smaller contractors face. Further, the public will also benefit from lower prices on public projects as a greater number of contractors will be competing for the jobs.

Louisiana, 

Help With Louisiana Surety Bonds: The Bonding Assistance Program

Competition in the market may drive down surety bond prices going forward. In the interim small businesses need all the help they can get. On this front, the state of New Jersey recently created the Small Business Bonding Readiness Assistance Program to help industry members obtain surety bonds. Louisiana is doing the same with the Louisiana Economic Development’s Bonding Assistance Program.

Who does the program help?

The Bonding Assistance Program is only available to those businesses that are members of the Louisiana Economic Development  Small and Emerging Business Development Program. Registering for the program is easy, but both the business and its owner must meet certain eligibility requirements.

For a person to be considered a Small and Emerging Business Person:

• The person must be a U.S. citizen or legal resident
• The person must be a Louisiana resident of at least one year
• The business being represented is owned and controlled by persons who individually have a net worth under $400,000 (excluding personal residences, business assets, and retirement accounts)
• A managing owner of a firm applying for the program must be a full-time employee of the firm

For a business to be considered a Small and Emerging Business:

• The business must be owned and controlled by one or more Small and Emerging Business Persons
• The business’ principle place of business is Louisiana
• The business is organized for profit to perform a lawful, commercially useful function
• The business’ net worth does not exceed $1.5M
• The business anticipates creating new full-time jobs

MKG Insurance Agency 

CA License No. 0J03013

Florida Department of Insurance License No. W487779

4021 N Fresno Street Suite 107 | Fresno, CA 93726

Toll-Free (866) 675-3933

web: mkginsuranceagency.com

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