Surety Bonds: Cost Questions

 

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How much does a surety bond cost?

If you are looking to start a business but have not yet established credit or insurance, you may need to purchase surety bonds. Surety bonds are used as an alternative for collateral in order to guarantee that the company will fulfill its obligations. The type of bond needed will depend on what line of work the prospective business is in. 

The cost of a surety bond varies depending on the type of bond and the company issuing it. The most common types are commercial bonds, which cover businesses that need to give assurances to their clients that they will fulfill their obligations as promised. 

Every state has its own specific laws governing surety bonding, so it’s important that you speak with your local agent about what kind of coverage is right for your business needs. 

So I don’t pay for the full bond amount?

Bonds are designed to protect the public and allow individuals with a good track record of following the law to continue their livelihood. The purpose of this blog post is to answer, “Do I have to pay the whole surety bond amount?”  This is an important question because many people know they can afford it but don’t want to commit all of their available funds.

The whole bond amount is designed to guarantee that the party who has posted the bond will fulfill his or her part of the contract. If you are only required to post a percentage of it, this percentage should be specified in your contract with whomever you are contracting. However, if your agreement doesn’t specify an amount, then you must pay the full surety bond amount before posting it.

You may not have to pay the full amount of the bond, but it does depend on what type of security you provide, how much time is left before expiration, and other factors. 

Can I get a surety bond with bad credit?

Many people believe that a bad credit rating is an automatic disqualifier for getting a surety bond. However, this is not true. Surety bonds are available to everyone, regardless of their credit history or score. It’s just more difficult to find the right provider and get approved with a low FICO score. 

The question on a lot of people’s minds is, “Can I get a surety bond with bad credit?” The answer to this question is yes, but it will be more difficult. A typical application for a surety bond can take up to 90 days, and you’ll need some collateral as well as money in the bank. 

It may not be possible if you’re seeking your first job or just starting out again after being unemployed for an extended period of time. You’ll also need at least one co-signer who has good credit and the ability to pay the premium on your behalf should you default on your bonds obligation.

What if I can’t pay for my bond?

What if you can’t pay for your surety bond? It may seem like a far-fetched idea, but it does happen. What do you do then? If the company has been in business for more than 12 months, they have to accept collateral as payment. You can also ask family or friends to co-sign the contract with you. This will help protect both parties and allow them to work out a payment plan that won’t put undue stress on either party.

If you are trying to get a surety bond but don’t have the money for it and can’t find any other way of getting one, then you need friends or family members who know someone in the bonding industry; someone with an established relationship with a bonding agent. 

All they have to do is ask that person if they would be willing to take on your bondsman responsibility in exchange for some collateral from you. If so, all that’s needed is a phone call from them telling their contact about what you want, and voila!

Is my credit history checked when getting a surety bond?

Getting a surety bond is an important step in the process of obtaining a license for your business. You may think that when getting approved, you’ll have to provide information about your credit history and debt load. The truth is, it’s very rare for surety companies to check these things. 

In most cases, they only want confirmation from the person who will be bonding the business that there are no debts or liens against them or their personal property. It’s nice to know that you don’t have to worry about this when going through the application process!

t’s important to know the difference between an indemnity bond, which is different from a fidelity or honesty bond, because your credit report will be checked if you are applying for either of these two types of bonds. 

If you are applying for an indemnity bond, then your credit history may be reviewed before being granted the bonding coverage requested. However, if you are applying for a fidelity or honesty bond, then your credit history won’t have any effect on whether or not your application is approved.

Want to know more? Visit Alpha Surety Bonds now!