Most of surety pricing and eligibility is private: filed per company, applied per account, published nowhere. There is one substantial exception, and because it is a federal program its terms are public and quotable.
What the program does
The Small Business Administration guarantees surety bonds issued to small businesses that might not meet the criteria other sureties apply. The guarantee runs between the SBA and the surety — it gives the surety a partial federal backstop on a bond it might otherwise decline.
That is the whole mechanism, and it explains everything downstream. The contractor still applies to a surety. The surety still underwrites. What changes is the surety’s exposure on a marginal file, which can change a decline into an approval.
The published terms
These are the figures, with their source, and they are the only pricing figures on this website that come with one.
The guarantee fee is 0.6% of the contract price for performance and payment bond guarantees. There is no fee for bid bond guarantees. The SBA states that the fee is refunded “if for some reason the bond is cancelled or not issued” — the spelling there is the SBA’s own, inside the quotation marks, and our prose writes canceled.
The SBA states the ceilings as $9 million for non-federal contracts and up to $14 million for federal contracts.
(SBA, surety bond guarantee program terms, read 2026-09-07.)
Three things the fee is not
It is not the bond premium. This is the most common misreading and the most expensive one. The 0.6% is the SBA’s guarantee fee. The surety’s own premium is a separate charge, set by underwriting against your account. A contractor budgeting 0.6% as the cost of the bond has budgeted a fraction of it.
It is not charged on bid bonds. The SBA does not charge a fee for bid bond guarantees, which matters for a contractor bidding frequently and winning occasionally — the guarantee is available at the bid stage at no fee, and the fee attaches only when the real bonds are issued.
It is not sunk if the bond does not issue. The SBA’s own language is that the fee is refunded if the bond is cancelled or not issued. A guarantee fee on a job you did not win is not a cost of bidding.
What the ceilings mean in practice
The two figures are contract-size limits on what the guarantee reaches, and the split between them is worth noticing: federal contracts get the higher ceiling.
For a contractor whose work is under those figures — which is most contractors the program is aimed at — the ceilings are not the binding constraint. The binding constraint is the surety’s own single-job and aggregate limits for the account, which are set by the balance sheet and the backlog and are usually well below the program maximum. The ceiling tells you where the program stops, not where you stop.
What it does not do
It does not remove underwriting. The surety reads the same file: financial statements and the level of assurance behind them, the work-in-progress schedule, the record on similar work, the contract itself, credit and indemnity. A guarantee improves the surety’s position on that file. It does not substitute for it.
It is contract surety, not everything. The program is aimed at performance, payment and bid bonds on contracts. The license and permit bonds a contractor posts to hold a trade license are a different product and are not what this program is for.
It is not a rate. Nothing about the guarantee sets or caps what a surety charges you. That remains an account-level underwriting decision, and it is why there is no rate table anywhere on this site.
Where it fits against the federal bond rules
If you are bidding federal construction, two separate federal frameworks are in play at once and they answer different questions.
The Miller Act and FAR part 28 decide whether bonds are required and how big they must be — bonds above the threshold at 40 U.S.C. § 3131(b) and FAR 28.102-1(a), with the penal sum at 100 percent of the original contract price under FAR 28.102-2(b), and a bid guarantee of at least 20 percent of the bid price capped at $3 million under FAR 28.101-2(b).
The SBA program decides whether you can get them. It has nothing to say about the requirement and everything to say about your access to a surety willing to meet it.
A contractor can be squarely inside the first framework and unable to act on it, which is precisely the gap the second one exists to close.
What this page does not cover
It does not state the eligibility criteria, the size standards, or the application mechanics, because those are program details we have not read in full and would not want to summarize from memory. The SBA publishes them, and they are the authority.
It also does not tell you whether the program is right for your file. That is a conversation with a producer who has seen your financial statements — and it is usually a short one, because the answer is often obvious from the balance sheet.
