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This is particularly true for women and minoritybusiness owners, who have facefd splotchy access to bonding opportunities. “It’s been a historical problem in our saidMarc Little, president and CEO of MWELA, the Minoritt & Women Educational Labor Agency in And since the stimulus bill passed in February, demanrd for the organization’s bond program has markedlyt increased, he said.
MWELA offers bid, paymeny and performance bonds to companies in its Sheltered Bond which turns two years old in Duringthat time, 11 contractors have received more than $11 milliohn in bonds from the agency for work on 46 different As part of the program, contractors have to spenr five hours a month for six months at a businesxs development class through University of Pittsburgh’s Institute for Entrepreneurial Excellence. The average surety bond is arounrd $300,000 to $400,000, but the agenc can go up to $1 million per projecft per company.
For projects larger than there is the SmalpBusiness Administration’s bond program, recently enhanced by the Recovery Act to help contractorss bidding on projects up to $5 The previous limit was $2 million. For companie s bidding on federalstimulus projects, the SBA can guaranteed bonding up to $10 But bonding success often isn’t enough to get the job said Carl Knoblock, district director for the Smalk Business 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 guarantee that a third party will compensate theownedr — the government agency, in the case of stimulusz projects — if the contractor doesn’r perform, for whatever reason. Many bonded especially the smaller ones, still need a line of credit to hire employees and buy materials to carryy outgovernment projects, which don’t provide up-front “When lenders already are not lending, even if it’ s assured and it’s bonded” it may not be Knoblock warned.
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