You may recall that earlier this year NASBP submitted a comment letter to the U.S. Small Business Administration (SBA) Office of Surety Guarantees (OSG) regarding a new requirement that small businesses that apply for surety bonds through the Surety Bond Guarantee (SBG) Program must furnish five years of financial statements to verify that they qualify as small businesses, based on the North American Industry Classification System (NAICS) code. As NASBP described in its letter, the change was a dramatic shift in policy from 2021, when OSG required businesses to furnish three years of financial statements.
On June 6, the SBA issued a final rule, which goes into effect on July 6, 2022. “The SBA recognized that requiring all SBG applicants to use a five-year average would create additional time and cost burdens on many SBG applicants. Additionally, as the commenter observed (NASBP), the SBG Program is housed in SBA's Office of Capital Access, which operates SBA's Business Loan program. SBA believes that treating the SBG Program similarly to the Business Loan programs promotes consistency among SBA's programs and creates less confusion about what rules apply to which programs."
In the final rule, SBA plans to add the SBG program to the list of programs in which applicants may elect to use a three-year receipts average or a five-year receipts average.
Please refer to the following link for additional information: https://www.federalregister.gov/d/2022-12131/p-60.