Impacts of the SBG Program
SBG helps skilled, small disadvantaged, and competitive opportunity gap contractors obtain bonding for construction projects they may need help securing in the standard bond market.
SBA is contracting to evaluate the program’s impact and effectiveness independently.
This evaluation will address the following long-term objectives of SBG:
Table of Contents
Increased Access to Capital
The SBG program helps aspiring small contractors compete in government contracting markets by providing surety bonding support for projects that require bonds. This allows small businesses to grow and diversify their revenue streams by taking on larger projects that may have needed to be within reach.
The program achieved its long-term output goals in the agency’s strategic plan and is working towards them again this year. Performance measures include the number of businesses assisted, their longevity and revenue growth, and job creation.
The program also works towards other goals in the agency’s strategic plans, such as setting district office goals and marketing the program more widely. A new electronic system is also being developed to reduce processing times and increase efficiency. This would allow the program to provide services more quickly and to a more significant number of businesses. This will save both time and money for sureties and small businesses.
Increased Access to Credit
SBG funding provides a quick and simple online application for small business owners. The application asks for basic information about your business, including a voided business check. The company also requires financial information, such as your yearly revenue and average daily bank balance.
The system would improve program efficiency and cut application processing time by an estimated 50%. This is expected to reduce costs per bond guarantee as well. The system is also designed to expand program eligibility by reducing the need for a standard surety to assume 100% risk.
Increased Access to Markets
The SBG program enables small contractors to bid on jobs they would otherwise not be able to qualify for due to credit challenges. SBG also provides a more flexible lending platform that includes loan amounts up to $10 million and repayment terms that span six months to 10 years based on funding needs and the type of loan.
The SBG program is a win-win opportunity for the small contractor and the producer or surety company that sponsors it. The program allows small and emerging contractors to increase their competitiveness in the government contracting marketplace while energizing the producers who foster relationships with these contractors.
Increased Access to Suppliers
Providing surety bonding support for government contracts opens up new opportunities for contractors and allows them to bid on projects that would otherwise be off-limits. This means they can increase their revenue potential and grow their business, increasing jobs and economic growth in the community.
SBG collects daily data to monitor performance targets and improve program efficiency. Credible information on underwriting activity, surety participation, and claims processing is collected, analyzed, and reported to management to identify the program’s strengths and weaknesses and ensure that funds are obligated and spent as intended.
SBG and portfolio companies operate in countries and regions around the world. Changes in laws, regulations, systems, and so forth in those countries or regions or the interpretation or application of such laws or regulations, including those relating to taxes (such as changes in monetary and fiscal policies, tax rates, or exemptions), could negatively impact SBG’s investment activities and its consolidated and non-consolidated results of operations and financial position.