It’s no secret that one of the biggest challenges small and minority/women-owned business enterprise (MWBE) contractors face is their ability to secure surety bond credit as required by law. To help counter this problem, the recently implemented New York Surety Bond Assistance Program now provides technical and financial assistance to these construction professionals who need surety bonds in New York.
Through the program, qualifying contractors can receive credit support in the form of irrevocable letters of credit for up to 30% of the total contract amount. The goal is to help both prime and subcontractors secure the bid, performance and payment bonds they need to access state projects. Under the program’s application requirements, the maximum project size cannot exceed $2 million, and applicants must meet the following criteria:
- Have experience operating a small business or minority/women-owned business enterprise in the state of New York for at least two years
- Have a minimum average gross income of $400,000 in the last two calendar years
- Have a maximum gross revenue of no more than $5 million in the most recent calendar year
- Have a credit score of at least 600
- Have previous experience completing similar work to the contract opportunity being pursued
To apply for financial assistance, small business contractors who meet the above eligibility requirements can fill out a pre-application assessment on the Empire State Development (ESD) Web site. Approval depends on a credit assessment by the ESD and available underwriting by a surety company.
Contractors who need assistance prior to being bonded can also enroll to receive training and technical support from the state of New York. To find out more about training or financial support, visit the bonding assistance page of the ESD Web site, or send an e-mail to Ms. Huey-Min Chuang at [email protected].
For more information about contractor surety bonds, contact a surety specialist online or by phone at 1 (800) 308-4358.