This act significantly increases the maximum contract guarantee amount under the Surety Bond Program to $\$20$ million and caps the SBA's administrative overhead for the program at 5% of the fund's available balance.
Edward "Ed" Markey
Senator
MA
The Expanding the Surety Bond Program Act of 2025 significantly increases the maximum contract guarantee limit under the Surety Bond Program from $\$6.5$ million to $\$20$ million to support larger small business projects. The Act also establishes a new administrative cap, limiting the Small Business Administration's (SBA) use of program funds for overhead and management costs to 5 percent annually. These changes aim to enhance the program's capacity to assist small businesses with major contract bonding needs.
Small Business Contract Guarantee Jumps to $20M: Opening the Door to Bigger Projects
If you’re a contractor, a construction firm, or any small business that relies on government contracts, this one is for you. The Expanding the Surety Bond Program Act of 2025 is essentially giving small businesses a much bigger line of credit when it comes to competing for major projects. It’s all about the Surety Bond Program, which helps ensure small companies can secure the financial guarantees needed to bid on large contracts.
The $6.5 Million Ceiling Just Got Blasted
The biggest change in this Act is the massive increase in the maximum contract size the Small Business Administration (SBA) can guarantee. Previously, if you were a small business looking to bid on a contract, the SBA’s guarantee under this program topped out at $6,500,000. Under this new Act, that ceiling is being raised to a whopping $20,000,000. Think about that for a second. If you run a mid-sized plumbing company or a specialized IT firm, this means you can suddenly compete for contracts that were previously reserved for much larger players. For example, a small construction company that used to max out at building a small wing of a school can now bid on building the entire facility, leveling the playing field against national corporations. This is a direct shot in the arm for small businesses looking to scale up without taking on undue financial risk.
Putting a 5% Cap on SBA Overhead
The second major change is less about the businesses and more about the bureaucracy managing the program. The Act puts a hard limit on how much money the SBA can use from the Surety Bond Program fund for its own administrative costs—things like IT systems, staff salaries, and outreach. Moving forward, the SBA can only use up to 5 percent of the total amount available in the fund at the start of any fiscal year for these overhead expenses (Section 2). This is a good example of transparency in action. By setting a clear, capped limit, the Act ensures the vast majority of the fund is dedicated to its primary purpose: backing small business bonds, not paying for agency management. They also cleaned up some confusing language in the existing law that previously made administrative expense calculations ambiguous, replacing it with this simple 5% rule.
What This Means for Your Bottom Line
For the small business owner, this Act translates directly into opportunity. If you’ve ever lost out on a major contract because you couldn’t secure the necessary bond—even though you knew you could do the work—this bill aims to fix that. It allows successful small businesses to graduate to bigger projects without having to cross the chasm of securing private financing for enormous bonds. The new $20 million limit significantly expands the range of federal, state, and local contracts accessible to the small business sector. While the SBA now faces a tight 5% budget limit for running the program, the benefit of having a clearer, larger guarantee available for small businesses far outweighs this administrative constraint, ultimately driving more capital and opportunity into the hands of the nation’s smaller contractors.