I want to write some surety bond falsehoods that perk up their ugly heads from time to time.
Surety Bond Myth 1:.
I require 2 bonds, one for each state I am running in. A broker informed me that I could get a discount if I buy two bonds from them. This is not true exactly what so ever, the surety would have more exposure and normally the rate can go up. When a broker informs you this they are most likely charging a broker cost and are minimizing the charge on the 2nd bond. Now if the bond for the various other state has a lower liability and the surety company has actually a lower filed rate it could be true. This is not the case 90 % of the time.
A way to get a lower rate for your surety bond is if you purchase your bond for multiple years than you would get a discount rate for the additional years.
Surety Bond Myth 2:.
The bank informed me that if I get a bond they would loan me the money The response in 99 % of the time is no. If a bank won't lend you the money you probably don't get the loan. If you cannot get the loan you probably cannot qualify for the surety bond. Now I am not telling you not to attempt to get a bond for a loan since you perhaps one from a million that could get it. The likely hood of getting it is slim to none. The surety a couple of years ago did do monetary assurance bonds, but the fall of Enron and a couple of other business triggered numerous sureties to fail. Given that the fall of Enron surety business have actually stopped securing loans.
Surety Bond Myth 3:.
The broker informed me that they would not run credit. Unless it's a notary bond or maybe a malfunctioning title bond the surety is going to run credit. 99 % of the time the surety will perform and examine your credit. If you asked a loan to extend credit from the bank would not they run your credit? The same philosophy opts for the surety since they are extending a type of credit too.
Surety Bond Myth 4:.
I was told I can use this bond for every state. If you are describing a state bond this is not true. Each state has their own bond kind and surety bond regulations. If it is a for a federal bond like an ICC broker bond which is a federal bond then you can indeed this for each state. Keep in mind simply since you have a federal bond does not indicate that the state does not need you to have a bond too.
Surety bond Myth 5:.
If I just get the bond the government will offer me my license. The government will not let you get your license until you get the bond, however that does not mean that they will offer you your license. You still must meet all the obligee's requirements initially. That includes a bond and various other requirements such as zoning, background checks and often instructional requirements.