ViralKaboom
Running a business is a complex operation with many different facets. From physical equipment and property to customer information, safeguarding business assets is essential for the health of any company.
The SBA Bond Guarantee Program allows contract bond companies to write bonds for contractors who cannot be underwritten using their Analyzed Net Worth (Total Assets minus Total Liabilities). This is a critical tool for small businesses looking to secure contracts.
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Contents
Protecting Customer Information
Keeping customer data secure is one of the most important things a business can do to protect itself. Personal information like names, credit card numbers, and addresses is used for orders, billing, and other essential purposes — but it also can damage a company’s reputation if it falls into the wrong hands.
SBA’s Surety Bond Guarantee Program is designed to help small businesses obtain the bid and payment/performance bonds they need to further their business enterprise. The program does not work directly with the businesses that need to purchase the bonds; instead, it provides financial backing, the bond guarantee, through participating surety companies.
This describes the policies, standards, and procedures for accepting, controlling, processing, and reviewing applications for surety bond guarantees under the Prior Approval Program. It guides field personnel in claim and settlement situations related to these bonds. It does not replace or supersede the corresponding SBA regulations that address underwriting, administration, claims, and recovery.
Protecting Financial Information
SBA’s Surety Bond Guarantee Program guarantees bid, payment, and performance bonds. This allows small businesses to secure bonds to access contract work that would not otherwise be available and helps strengthen the national economy.
In the NPRM, SBA sought comments on whether SBG program regulations should be repealed, replaced, or modified because they are outdated, unnecessary, burdensome, or inconsistent with industry standards. The proposed revisions reflect the responses received from the public on these issues.
The SBG program has two components—one requiring prior approval of every bond guarantee (the Prior Approval Program) and one not requiring prior authorization (the Preferred Program). Both programs require a PSB Surety to notify SBA by electronic transmission or monthly bordereau (as agreed between the PSB and SBA) of all approved Bid and Final Bonds and increases and decreases in Contract or Bond amounts. SBA also requires that a PSB Surety notify SBA immediately of any Imminent Breach of the terms and conditions of an existing Contract covered by the Bond.
Protecting Employee Information
In today’s world, data breaches can affect a business in many ways. For one, they may damage a company’s reputation and even lead to legal liability. For this reason, protecting all forms of information, including employee data, is essential.
Providing your employees with a safe environment is essential to safeguarding their data and preventing data theft. For example, only allow your employees to access the necessary data systems. Additionally, separate payment systems from other programs and avoid using the same computer for payments and surfing the Internet.
The SBA’s Surety Bond Guarantee Program allows contractors to get the bonds they need to do business with federal, state, and local governments. The program enables small and emerging companies to qualify for bonds for projects up to $6.5 million (non-federal) or $10 million for federal contracts with a contracting officer’s certification. The program also helps eliminate the need for a collateral deposit.
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Protecting Other Information
It’s easy to see why a business that can’t secure a bond might be unable to attract customers or cultivate a client base. That’s precisely why the SBA created its surety bond guarantee program – to ensure that businesses with solid credit and capacity can obtain the contract bonds they need without waiting to be approved in the standard marketplace.
SBA provides the financial backing for these bonds by partnering with private, commercial surety companies. The PSB pays a small fee to participate in the program, while the SBA covers most claims paid on the contract bond principal.
Participating PSBs must follow SBA’s standard operating procedure for bond guarantee programs to remain in the program. This SOP describes the policies and procedures for accepting, controlling, and processing applications for bond guarantees. It clarifies the role of field personnel in default, claim, and settlement situations related to these guarantees.
