Surety bonds

U.S. Small Business Administration, 2 min read

This lesson is a guide published on sba.gov.

What you'll get

The SBA's page on its surety bond guarantee explains that a bond is a surety company's promise to a customer that the work will be finished and the suppliers and subcontractors paid, and that the SBA backs the bond so a small contractor who might not qualify otherwise can get one. It lists a fee of 0.6% of the contract price on performance and payment guarantees and none on bid bonds, and says you apply through a surety agency, not the SBA.

Do this week

Ask one general contractor or public buyer you want to work for whether they require bonds, and if they do, use the page's agency lookup to find a surety agency in North Carolina and ask what it would want to see about your firm.