SBA Implements Temporary Decrease in Surety Bond Guarantee Program Fees
The U.S. Small Business Administration (SBA) has issued a notice that it is decreasing its fees for the Surety Bond Guarantee Program (BGP) on a temporary basis. Beginning October 1, 2018, the fee charged to sureties will decrease from 26% of the bond premium to 20% of the bond premium and the fee charged to the bond principal will decrease from $7.29 per thousand dollars of the contract amount to $6 per thousand dollars of the contract amount. The decrease in the fees will expire on September 30, 2019. This change reverses an increase in the fees that SBA issued 12 years ago to address a deficiency in the revolving fund for the BGP. SBA believes that the revolving fund now has sufficient funds so that the fees can be decreased on a temporary basis. SBA will review the program during this one-year period to determine if the fees are sufficient and whether the change increases participation in the BGP.
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