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SBA Bonding

Step One: Determine Business Eligibility

Good character

Reasonable expectation of successful completion 

U.S. for-profit entity with legal U.S. owners Eligible to do business with the federal government

Not involved in bankruptcy - SBA eligible after final discharge

Current on taxes & repayment agreements 

Step Two: Contract Qualifications 

SBA QuickApp Up to $400,000 

• 2-page application

• No financials required by SBA

• Decisions in hours 

Up to $6.5 Million Any Project

  • Any Project Federal, State, Local, Private and GC 

Up to $10 Million Federal Contracts 

  • with Contracting Officer certification to SBA 

Step Three: Determine Bond Eligibility 

  • Bond amount cannot exceed the contract amount 

  • Bond requirement in bid/contract documents 

  • Maintenance terms up to 2 years - no special consideration/Longer terms considered if standard/statutory 

  • All eligible contracts must be submitted for SBA guarantee 

  • No restriction on program participation length 

  • Ineligible bond types: bid bonds where the project has bid, substantially or completed projects, stand-alone maintenance, subdivision, mining reclamation, commercial & fidelity bonds 

QuickApp Qualifications - Jobs Up to $400,000 

  • No financials required/ WIP 

  • No aggregate limit with SBA 

  • Surety establishes qualifications 

  • Maintenance terms up to 2 years 

  • Performance periods up to 1 year

  • LDs up to $1,000/day 

  • No previous contract defaults/ claims 

 

Exclusions:

hazardous waste removal,  timber sales, pure demolition & projects in progress

Financial Statement Qualifications 

For Year End -Business Financial Statements

  • Jobs up to $1 million = Quality in-house

  • Jobs up to $2 million = In-house plus or CPA compilation

  • Jobs from $2 million to $6.5 million = CPA review

  • Jobs over $6.5 million = CPA audit 

Interim Business Financial Statements (Last reconciled) 

  • 6 months minimum from FYE

  • Quality in-house interim if FYE is in-house/in-house plus/compilation

  • CPA compiled or in-house plus interim if FYE is review/audit 

In-House Plus = CPA Compilation

  • Computer-generated accrual balance sheet & income statement + aged schedules of A/R & A/P + CPLTD & equity section that tracks

 

Consolidated Financial Statements 

  • Must include consolidating schedules 

  • Considers only working capital of applicant

Standard Application Jobs over $400,000

  • Year-end business financial statements last 3 years 

  • 6-month interim business financial statement if due 

  • Affiliate tax returns last 3 years if applicable

  • Bank reference letter

  • Personal financial statement  

  • WIP schedule 

 
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CONTACT US

NIELSON HOOVER AND COMPANY

 220 CONGRESS PARK DRIVE, SUITE 100 DELRAY BEACH, FLORIDA 334455

TEL: 561-676-2322

Construction Bonds 101 Copyright 2020