CA Pharm Bd surety bond requirement

[debkell]

I am a small pharmaceutical wholesaler--it is a small, part-time mail order business -dealing with medical test kits and devices-rarely any medications. The State Board is going to require a $25,000 surety bond from all wholesalers licensed in CA as of Jan 2006. What category does this fall into and can you give me a range of what the cost will be? How long does it take to apply and get the bond?

Is getting this kind of bond like taking out a second mortgage or equity line?
I am afraid that this requirement will put a small wholesaler like myself out of business. I only do about $120,000 a year in sales-gross.

Any answers you can give me would be appreciated.

[Surety Guy]

This would be considered a commercial license bond. The rates for this type of bond is based on the following:

1. What the bond is guaranteeing
2. The personal credit of the owner(s)
3. The personal financial statement of the owner(s)
4. Business Financial Statements (Usually based on the fiscal year end and a year to date)

In general the rates are as low as 1% of the bond amount or $250 annually, but can be as high as 15% for some bond types for "high risk" applicants.

The only way to find out the rates for your unique business is to apply: License Bond Applications

[debkell]

Thanks--that makes me feel a bit better--kind of like buying an insurance policy.