Sureties Tell Congress SBA Needs Help
SFAA members visited Congressional offices as part of the group’s 100th Anniversary Annual Meeting. They stressed the important role surety bonds play in assuring that qualified contractors perform the needed work, and that workers and suppliers on the jobs get paid.
For small and emerging contractors, the SBA Program should be the bridge between the contractors and the required bonding, the group said. It is concerned that myriad federal and state agencies would only try to duplicate the SBA Program if it were abandoned. They believe the money spent replicating the SBA would be better spent helping small contractors get bonds.
“A well-run SBA Program that provides sureties with certainty about the rules and confidence in the consistency of the administration is needed,” SFAA said in a statement. That has not always been the case. In the past, SBA bond guarantees were unraveled by the SBA when a claim was presented, according to SFAA. Members of Congress were told that practice just has to stop in order to encourage surety participation in the Program.
Fees recently were raised for sureties and small businesses participating in the Program. While Congress has never asked that the Program be self-sufficient, and it stands to reason there will be losses in the Program during difficult economic times, “the guarantees are to encourage sureties to write bonds for contractors who otherwise would not be able to obtain a surety bond,” SFAA said.
SFAA members urged Congress to use the SBA reauthorization legislation to make this Program live up to its potential. “The surety industry is committed to help make the Program work for all concerned,” SFAA conculded.