Small contractors who rely on SBA-backed bonding through the agency's Prior Approval track will pay more for each guaranteed bond starting next month, and so will the sureties that write those bonds. The U.S. Small Business Administration announced the increase in a Federal Register notice published Oct. 30, 2026, raising the contractor fee from $6.00 to $7.29 per thousand dollars of contract amount and the surety fee from 20 percent to 26 percent of the bond premium. The notice states that "the fee change described in this document will apply to all SBA surety bond guarantees approved on or after November 30, 2026."
The change reverses a cut SBA made in 2018 and restores the earlier rates exactly. Two groups escape it: contractors working on manufacturing projects, and every bond written through the Preferred Surety Bond program, where fees stay where they are.
How the Prior Approval Fees Change on Nov. 30
SBA's Surety Bond Guarantee (SBG) Program guarantees bid, payment and performance bonds for small and emerging contractors who cannot obtain surety bonds through regular commercial channels. The guarantee is an agreement under which SBA assumes a set percentage of a surety's loss if a contractor defaults on the underlying contract. The program runs two tracks, Prior Approval and Preferred, and the new notice raises fees only on the first.
Under 13 CFR 115.32, the notice sets two new charges for Prior Approval guarantees:
- The Surety fee rises from 20 percent of the bond premium to 26 percent of the bond premium.
- The Contractor, or Principal, fee rises from $6.00 per thousand dollars of the contract amount to $7.29 per thousand dollars of the contract amount.
The fees apply to each guaranteed bond other than a bid bond. SBA's surety bonds program page says the agency "does not charge a fee for bid bond guarantees," and nothing in the notice changes that.
Why Manufacturing Projects and Preferred Sureties Keep the Old Rates
The notice carves out bond guarantees on projects under NAICS Codes 31, 32 and 33, the manufacturing sectors. For those projects in the Prior Approval track, the Surety fee will remain 20 percent of the bond premium and the Principal fee will remain $6.00 per thousand dollars of the contract amount. The notice does not explain why SBA chose to exempt manufacturing.
The Preferred Surety Bond program also stays put. Under 13 CFR 115.66, its Surety fee will remain 20 percent of the bond premium and its Principal fee will remain $6.00 per thousand dollars of the contract amount.
The notice's description of the program's finances points the same way. "Since implementation, the Prior Approval program has operated at a funding deficit while the Preferred Surety Bond program has operated at a marginal funding surplus," the notice states. SBA deposits the fees it collects from principals and sureties into a revolving fund that covers the program's liabilities and certain program expenses.
What Happened to the 2018 Surety Bond Fee Cut?
The new rates match what contractors and sureties paid before Oct. 1, 2018. On that date, according to the notice, SBA cut the surety fee from 26 percent to 20 percent of the bond premium and the principal fee from $7.29 to $6.00 per thousand dollars of the contract amount. At the time, SBA determined the program's revolving fund was sufficient to cover projected, unfunded liabilities.
The agency never presented the cut as permanent. "SBA decreased the guarantee fees temporarily to evaluate the effects of a fee reduction and the implications for participating Sureties and SBA," the notice says. It cites the earlier Federal Register actions at 83 FR 36658 (July 30, 2018) and 85 FR 62362 (Oct. 2, 2020). Read against the deficit the notice describes, the increase looks like the end of that experiment for the Prior Approval track, while the Preferred track keeps its lower rates.
SBA's legal basis is its statutory authority under 15 U.S.C. 694b(h) "to establish such fee or fees for small business concerns and premium or premiums for sureties as it deems reasonable and necessary," and to run the program "on a prudent and economically justifiable basis." The agency's rules at 13 CFR 115.32(b) and (c) and 115.66 provide that fees "will be determined by SBA and published in Notices in the Federal Register from time to time."
Thomas Kimsey, Associate Administrator of SBA's Office of Capital Access, signed the notice. Jermaine Perry, Director of the Office of Surety Guarantees, is the listed contact.
SBA's Own Surety Page Still Shows the 0.6% Fee
Contractors checking SBA's website will find numbers that no longer tell the whole story for Prior Approval bonds. As of publication, the surety bonds page states that "All performance and payment bond guarantees require small businesses to pay SBA a fee of 0.6% of the contract price." That 0.6% figure equals the current $6.00 per thousand rate. It will stay accurate for Preferred program bonds and for manufacturing projects, but not for other Prior Approval guarantees approved on or after Nov. 30.
The same page lists the program's guarantee limits: up to $9 million for non-federal contracts and up to $14 million for federal contracts. The notice does not change those limits. The page also notes that SBA returns the guarantee fee if a bond is cancelled or not issued.
What It Means for Contractors
Firms that bond through a Prior Approval surety should expect a higher SBA charge on payment and performance bonds approved on or after Nov. 30, 2026. The trigger is the date SBA approves the guarantee, so a contractor with a bid pending now could land in either fee period depending on when the award and the bonding paperwork come through. Contractors with near-term awards can ask their surety agent whether a guarantee can be approved before the deadline.
The increase also reaches sureties, whose share of the bond premium paid to SBA rises from 20 to 26 percent. Sureties may pass some of that cost through, which makes it worth comparing quotes. A contractor working with a surety that participates in the Preferred program will see no SBA fee change at all, and firms bidding manufacturing work under NAICS 31 through 33 keep the old Prior Approval rates.
Bid bonds remain free of SBA fees, so the cost of chasing work does not change. The higher charge applies once a contractor wins and needs the payment and performance bonds to sign. Firms that budget bonding costs into their bids should update those figures for Prior Approval bonds approved after the effective date and confirm their project's NAICS code before assuming the exception applies.
