How much does a surety bond cost is a common question and the answer is influenced by a number of factors related specifically to the person and company seeking the bond. Below are the top influencers:
- Bond Type – every bond has its own inherent risks and that changes the price of the bond. For example, a bond for a used car dealership carries more risk than a bond for a notary bond, so the surety bond cost will be higher.
- Bond Amount – the price you pay for your bond is a percentage of the total bond amount. That means a $50,000 bond will always cost more than a $5,000 bond.
- Personal Information – a very important determining factor for surety bond cost is your personal credit history. The better your credit, the lower the risk for the surety company to give you the bond, the lower the bond cost. While people with bad credit can still get bonds, the cost will be higher until your credit improves. (A big red flag is overdue child support.)
- Reputation – if references are required for your bond, having a positive reputation and good references will lower the risk to the surety company and, therefore, the surety bond cost.
- Criminal Record – when it’s necessary, the surety bond company may have to run a background check before issuing the bond. Past convictions may not automatically disqualify you, but it can place you in a different market with higher risk and surety bond cost. Being upfront and honest about what the surety bond company may find will help this process.
- US Citizenship – non-US citizens are seen as higher risk by surety companies because they have no ties to this country that would keep them here to pay off the bond. Proof of being in the process of obtaining citizenship can help, however.
- Business Information – the credit history of your company is just as important as that of yourself. While a bad company credit history won’t necessarily disqualify you from getting a bond, it will raise the risk and, therefore, the surety bond cost.
- Experience – there is more risk in bonding a new or first-time business owner than in giving a bond to an experienced business owner.
- Finances – managing your money well helps the surety company predict how your company may perform in the future.
Another huge factor in determining the surety bond cost is the surety company you choose. You want one that can handle large amount surety bonds or clients with bad credit, have a quick turnaround, and an extensive network of carriers. Brunswick Companies is all of that, so you can be assured our experts will do everything possible to get you the best surety bond cost for your needs.