Senate Bill 123 was signed by Chris Christie on January 4, 2017, to assist small businesses in New Jersey. The bill was voted on unanimously and will help small businesses purchase contract surety bonds that they may have previously struggled to obtain. Businesses with under 100 employees are often met with the hurdle of posting mandated bond amounts for development or contracting projects. More specifically, this bill will help small business owners obtain bonds for projects they want to bid on, but don’t have the funding or qualifications for.
How does this bill help businesses get bonded?
The bill will create the Small Business Readiness Assistance Program to help small businesses in a few different ways. First of all, the program will provide services and assistance to help teach businesses about qualifying for surety bonds through a series of educational workshops. This program seeks to provide a better understanding to small business owners about what surety underwriters are taking into consideration during the bond application process. Increased knowledge of what it takes to obtain the bond is often missing when small businesses seek to satisfy bonding requirements on larger projects. The program will additionally help establish the Enterprise Zone Assistance Fund for small businesses, which will help pay for public and economic development projects. The bill essentially creates a support framework to help small business obtain the surety bond they need, help businesses meet the requirements of the contract between their client and themselves, and funnel more dollars into the small business ecosystem within the state.
Why is this important to small businesses?
Contract bonds such as bid and performance bonds are often difficult to qualify for and expensive for smaller companies. The primary purpose of a bid bond is to assure the developer that the low-bidding owner will enter into a contract for the price quoted in their bid. For example, if a contractor submits a bid to complete a construction project, the company will need to provide a contract bond along with the bid. The Small Business Readiness Assistance Program hopes to help small businesses compete with larger businesses when bidding on public projects or contracts offered by the State or federal government.
If you have any questions about the program specifically, contact the EDA for more information. The Surety Bond Insider will continue to update this post regarding new information about this program as it becomes available. If you have questions about getting bonded in New Jersey or would like to request a free surety bond quote, contact SuretyBonds.com today.
For more information on contract and contractor bonds, check out these resources: