LED Bonding Assistance Program

As of July 2008, Louisiana Economic Development’s Bonding Assistance Program (BAP) has approximately $6 million available in a revolving pool for new bond guarantees, creating more possibilities for small business in Louisiana. By providing companies with the ability to bid on private and public jobs, entrepreneurs are finding new opportunities to compete for projects that can lead to financial security and potential growth.

When a qualified Small and Emerging Business requires quality bid, performance and payment bonds from surety companies at reasonable rates, the Bonding Assistance Program can help reach the bonding capacity required for specific projects.

BOND UNDERWRITING
Bond underwriting is accomplished by the surety company, and the surety company has final bonding approval authority.

Key underwriting criteria include:

• Previous scope of work completed relative to the type being considered
• Cash on hand relative to the cash requirements of the project being bid
• Credit history

Under the program, bond underwriting is accomplished by the surety company, which has final bonding authority. When bonding is approved, the BAP provides collateral in the form of an Irrevocable Letter of Credit to the surety company of up to 25 percent of the base contract amount, or $200,000, whichever is less, on a project specific basis. This allows for mitigation of risk to the surety, thus making the project bondable.

Access to bonding assistance is gained through certification in the Small and Emerging Business Development Program (SEBD). Click here for the SEBD Application form. Completion of the Louisiana Contractors Accreditation Institute (LCAI), or waiver approval by LED is required for all participants in the Bonding Assistance Program. For more information on LCAI, click here.

For a listing of participating sureties and agencies please click here. (updated 9.24.08)

For more information, contact Abigail Lefebvre, 225.342.4320 or alefebvre@la.gov.