Surety Bond Information
Posted by De_Trainer | Posted in
Finding surety bond information is almost as hard as finding surety markets.
I want to contribute to the community by helping businesses as well as consumers to find easy to read surety information. Let's start with the basics, what is a surety bond?
A surety bond is a three part contract. The principal which is you, the obligee the entity requiring the bond, and the surety the one insuring the principal's obligations. A surety bond is in place to protect the obligee from what is drafted in the bond form. A bond can protect the obligee for payments, laws, contractual obligations and much more. Normally bonds are required to safeguard the public from dishonest acts by the principal.
Who needs bonds?
The majority of bonds that are required are for businesses that are highly regulated by the state or federal government such as a contractor, car dealer even mortgage brokers. These bonds are needed in order to obtain a license by the state. If the business cannot obtain bonding the state will not grant them their license.
What happens if you get a bond claim?
If you get a claim on your surety bond the surety will seek legal action to collect payment for the claim.
How to underwrite the bond.
Since you are applying for an unsecured loan. The surety will evaluate your credit, personal financials as well as your experience and business financials.
How much does the bond costs?
The cost is being different for each surety, bond type, state and credit rating. The cost for can be anywhere between 1% to 25% all depending on your scenario.
www.suretybondblog.com
Very true. The majority of bonds that are required are for businesses that are highly regulated by the state or federal government such as a contractor, car dealer even mortgage brokers.
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