February 27, 2015 Sent via email to: thomas.mclain.middleton ...
National Association of Surety Bond Producers 1140 19th Street NW, Suite 800. Washington, DC 20036-5104 Phone: (202)686-3700 Fax: (202)686-3656 Web Site: http://www.nasbp.org E-mail: [email protected]
February 27, 2015 Sent via email to: [email protected], [email protected] Chairman Thomas Middleton, Senate Finance Miller Senate Office Building, 3 East Wing 11 Bladen St, Annapolis, MD 21401
Chairman Dereck Davis, House Economic Matters 231 House Office Building, 6 Bladen Street Annapolis, MD 21401
RE: Support of Senate Bill 579/HB 844 – Maryland Small Business Development Financing Authority – Small Business Surety Bond Program Dear Chairmen Middleton and Davis: On behalf of the National Association of Surety Bond Producers (NASBP) a national trade association representing firms employing surety bond producers, including licensed resident and non-resident agents placing contract surety bonds in Maryland, we support S.B. 579/H.B. 844, legislation that increases the maximum bond amount available for a bond guarantee issued by the Small Business Surety Bond Program (Program) of the Maryland Small Business Development Financing Authority (MSBDFA) from $1 million to $2.5 million. The Program was created to ensure that small and emerging contractors who do not qualify for surety credit in the standard market can seek such credit through an authorized state program intended to assist them in developing as viable businesses. Such an increase will benefit this worthy program in further achieving such aims. S.B. 579/H.B. 844 is analogous to legislation recently enacted at the federal level due to the procurement trend that public works contracts at federal and state levels, for a variety of reasons, are being let in larger amounts. Recognizing that trend, the U.S. Congress increased the surety bond guarantee available under the U.S. Small Business Administration’s Surety Bond Guarantee Program from $2.5 to $6.5 million. S.B. 579/H.B. 844 will allow the MSBDFA program to keep pace with this procurement trend. Furthermore, in addition to the change to the maximum bond amount, by increasing the loss guarantee available to the surety from $1.35 million to $2.25 million you also are encouraging more regulated licensed sureties in Maryland to participate in Program. Small and emerging businesses not qualifying for surety credit in the standard market may turn to unregulated alternatives where they can be duped by unscrupulous persons seeking vulnerable businesses and offering surety and financial credit to anyone, regardless of the firm’s qualifications, financial wherewithal, or experience, and at rates many times higher than regulated markets. Without
capable programs, such as those through MSBDFA, such businesses can be duped and ultimately set up for eventual failure, as they may be permitted to overreach in their credit borrowing without the necessary discipline and business infrastructure to service their obligations. NASBP recommends that you issue a favorable report for SB 579/HB 844. Please feel free to contact me should you have further questions. Respectively submitted for your consideration,
Larry LeClair Director, Government Relations cc: Members of the Senate Finance Committee Members of the House Economic Matters Committee John A. Andryszak, Popham & Andryszak, P.A. Timothy L. Smoot, Meridian Management Group, Inc.
February 27, 2015 Sent via email to: [email protected], [email protected] Chairman Thomas Middleton, Senate Finance Miller Senate Office Building, 3 East Wing 11 Bladen St, Annapolis, MD 21401
Chairman Dereck Davis, House Economic Matters 231 House Office Building, 6 Bladen Street Annapolis, MD 21401
RE: Support of Senate Bill 579/HB 844 – Maryland Small Business Development Financing Authority – Small Business Surety Bond Program Dear Chairmen Middleton and Davis: On behalf of the National Association of Surety Bond Producers (NASBP) a national trade association representing firms employing surety bond producers, including licensed resident and non-resident agents placing contract surety bonds in Maryland, we support S.B. 579/H.B. 844, legislation that increases the maximum bond amount available for a bond guarantee issued by the Small Business Surety Bond Program (Program) of the Maryland Small Business Development Financing Authority (MSBDFA) from $1 million to $2.5 million. The Program was created to ensure that small and emerging contractors who do not qualify for surety credit in the standard market can seek such credit through an authorized state program intended to assist them in developing as viable businesses. Such an increase will benefit this worthy program in further achieving such aims. S.B. 579/H.B. 844 is analogous to legislation recently enacted at the federal level due to the procurement trend that public works contracts at federal and state levels, for a variety of reasons, are being let in larger amounts. Recognizing that trend, the U.S. Congress increased the surety bond guarantee available under the U.S. Small Business Administration’s Surety Bond Guarantee Program from $2.5 to $6.5 million. S.B. 579/H.B. 844 will allow the MSBDFA program to keep pace with this procurement trend. Furthermore, in addition to the change to the maximum bond amount, by increasing the loss guarantee available to the surety from $1.35 million to $2.25 million you also are encouraging more regulated licensed sureties in Maryland to participate in Program. Small and emerging businesses not qualifying for surety credit in the standard market may turn to unregulated alternatives where they can be duped by unscrupulous persons seeking vulnerable businesses and offering surety and financial credit to anyone, regardless of the firm’s qualifications, financial wherewithal, or experience, and at rates many times higher than regulated markets. Without
capable programs, such as those through MSBDFA, such businesses can be duped and ultimately set up for eventual failure, as they may be permitted to overreach in their credit borrowing without the necessary discipline and business infrastructure to service their obligations. NASBP recommends that you issue a favorable report for SB 579/HB 844. Please feel free to contact me should you have further questions. Respectively submitted for your consideration,
Larry LeClair Director, Government Relations cc: Members of the Senate Finance Committee Members of the House Economic Matters Committee John A. Andryszak, Popham & Andryszak, P.A. Timothy L. Smoot, Meridian Management Group, Inc.
