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This is particularly true for womeb and minoritybusiness owners, who have facedr splotchy access to bonding “It’s been a historical problem in our said Marc Little, president and CEO of the Minority & Women Educational Labor Agencg in Lawrenceville. And sincer the stimulus bill passedxin February, demand for the organization’sx bond program has markedly increased, he said. MWELA offersz bid, payment and performance bondxs to companies in its Sheltered Bond program, which turns two yearss old in July. During that time, 11 contractors have receiver morethan $11 million in bonds from the agency for work on 46 differentg projects.
As part of the contractors have to spend five hoursa a month for six monthse at a business development class through Universitygof Pittsburgh’s Institute for Entrepreneurial The average surety bond is arouned $300,000 to $400,000, but the agency can go up to $1 millionm per project per company. For projecta larger than that, there is the Small Busines Administration’s bond program, recently enhanced by the Recoverty Act to help contractors bidding on projects upto $5 The previous limit was $2 million.
For companied bidding on federalstimulus projects, the SBA can guaranted bonding up to $10 But bonding success often isn’yt enough to get the job done, said Carl district director for the Small Business Administration’z Pittsburgh office. “The challenge is they may be able to get but they may not be able to get the he said. Bonds guarantee that a thirc party will compensate the owner thegovernment agency, in the case of stimuluw projects — if the contractor doesn’t perform, for whatever reason.
Many bondesd companies, especially the smaller ones, stilp need a line of credit to hire employeese and buy materials to carry outgovernmentg projects, which don’t provide up-front cash. “When lendersx already are not lending, even if it’sw assured and it’s bonded” it may not be Knoblock warned.
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