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I would like to write about some surety bond falsehoods that perk up their ugly heads from time to time.

Surety Bond Myth one:

I need two bonds, one for each state I am operating in. A broker told me that I could get a discount if I buy two bonds from them. This is not true what so ever, the surety would have more exposure and generally the rate can go up. When a broker tells you this they are probably charging a broker fee and are reducing the fee on the second bond. Now if the bond for the other state has a lower liability and the surety company has a lower filed rate it may 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 buy your bond for multiple years than you would receive a discount for the additional years.

Surety Bond Myth two:

The bank told me that if I get a bond they would loan me the money The answer in 99% of the time is no. If a bank won't lend you the money you probably don't qualify for the loan. If you can't qualify for the loan you probably can't qualify for the surety bond. Now I am not telling you not to try to get a bond for a loan because you maybe one out of a million that may get it. The likely hood of getting it is slim to none. The surety a few years ago did do financial guarantee bonds, but the fall of Enron and a few other companies caused many sureties to go out of business. Since the fall of Enron surety companies have stopped securing loans.

Surety Bond Myth three:

The broker told me that they would not run credit. Unless it's a notary bond or maybe a defective title bond the surety is going to run credit. 99% of the time the surety will perform and review your credit. If you wanted a loan to extend credit from the bank wouldn't they run your credit? The same philosophy goes for the surety because they are extending a form of credit too.

Surety Bond Myth four:

I was told I can use this bond for every state. If you are referring to a state bond this is not true. Each state has their own bond form and surety bond regulations. If it is a for a federal bond like an ICC broker bond which is a federal bond then you could yes this for each state. Keep in mind just because you have a federal bond does not mean that the state does not require you to have a bond too.

Surety bond Myth five:

If I just get the bond the government will give me my license. The government will not let you get your license until you get the bond, but that does not mean that they will give you your license. You still must meet all of the obligee's requirements first. That includes a bond and other requirements such as zoning, background checks and sometimes educational requirements. www.integritybonds.com/surety-bond.html