S. 2232, Expanding the Surety Bond Program Act of 2025

S. 2232 would amend the Surety Bond Program at the Small Business Administration (SBA) to increase the guarantee authority for per-contract surety bonds from $6.5 million to $18 million. The act also would add a temporary automatic reduction when the SBA seeks supplemental funding. Surety bonds provide financial guarantees that contracts will be completed according to mutual terms; if a contract is not completed the bond covers the losses.

S. 2232 also would allow administrative expenses to be paid from the Surety Bond Program’s revolving fund, capped at 2 percent of the fund balance each fiscal year, and require the agency to notify the Congress when seeking supplemental funding for the bond program. Finally, the act would require the SBA to report annually to the Congress on the financial health of the guarantee fund for the surety bonds and the Government Accountability Office (GAO) to report on the application process for the program and recommendations for improving the program’s efficiency.

Using information from the agency, CBO expects that the costs associated with increasing the guaranty authority under S. 2232 would be insignificant and that the agency would use fees generated by the Surety Bond Program to cover those costs. Additionally, based on the costs of similar provisions, CBO estimates that the additional reporting costs for GAO and the SBA would be insignificant. On that basis, CBO estimates that implementing S. 2232 would cost, on net, less than $500,000 for the 2026-2031 period. Any related spending would be subject to the availability of appropriated funds.

The CBO staff contact for this cost estimate is Zunara Naeem. The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis.