http://www.slimorama.com/content/2011/06/
This is particularly true for women and minoritubusiness owners, who have faced splotchy acces s to bonding opportunities. “It’s been a historical problem in our saidMarc Little, president and CEO of the Minority & Women Educational Labor Agency in Lawrenceville. And sincer the stimulus bill passedin February, demanc for the organization’s bond program has markedly he said. MWELA offers bid, payment and performancr bonds to companies in its ShelterefBond program, which turns two years old in July. During that 11 contractors have received morethan $11 millioh in bonds from the agenchy for work on 46 differentg projects.
As part of the contractors have to spend five hours a montj for six months at a business development clases through Universityof Pittsburgh’s Institute for Entrepreneurial The average surety bond is around $300,0090 to $400,000, but the agency can go up to $1 million per projecf per company. For projectsx larger than that, there is the Small Businesz Administration’s bond program, recently enhanced by the Recoveryy Act to help contractors bidding on projects upto $5 The previous limit was $2 million.
For companies bidding on federalstimulus projects, the SBA can guarantee bonding up to $10 But bonding success oftenb isn’t enough to get the job done, said Carl Knoblock, distric director for the Small Businesss Administration’s Pittsburgh office. “The challenge is they may be able to get but they may not be able to get the he said. Bonds guaranteee that a third party will compensate theownetr — the government agency, in the case of stimulus projectx — if the contractor doesn’t perform, for whateved reason.
Many bonded companies, especially the smaller still need a line of credit to hire employees and buy materials to carry out government which don’t provide up-front cash. “When lender already are not lending, even if it’sx assured and it’s bonded” it may not be funded, Knobloc k warned.
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