Premium Payments?

[Bond Guy]

How often are the premiums paid on a $25,000 surety bond? I am in desparate need of my bond in PA but the premium is quite high. Is there any way at all to make payments? Do you know of any companies that would pay the premium for me and I can repay them say on a monthly basis? Thanks.

[marietta68]

Originally Posted by Bond Guy

How often are the premiums paid on a $25,000 surety bond? I am in desparate need of my bond in PA but the premium is quite high. Is there any way at all to make payments? Do you know of any companies that would pay the premium for me and I can repay them say on a monthly basis? Thanks.

Premiums are paid annually. I've been in the bond business for over 20 years and have never known premium financing to be available for surety - the bonds can't be cancelled for nonpayment, unlike insurance policies. Further, if your cash flow isn't adequate to allow you to pay business expenses, qualifying for the bond would be difficult - which is why your premium is high.

If anyone has avenues for premium financing for surety bonds, please feel free to correct me.

[Admin]

Marietta hit the nail on the head. Premium financing is not available for surety bonds unless it can be cancelled mid-term with a pro-rated premium return. The first year's premium is almost always fully earned upon issuance.

This means that financing is available for suretyship on renewals. Our agency looked into it, but decided it was not a worthwhile pursuit.

[Surety Wizard]

I was just made aware of a company out there that will in fact finance a premium for a bond. They mostly finance insurance premiums but they did in fact finance a premium for a Mortgage Broker Bond. The company has 3 or 4 options for financing and this client was making 4 payments for the bond. The premium is paid up front by the company and they hold collateral to secure repayment of the premium. I guess there is a niche for everyone out there. I suggest an internet search for such companies.

[Best_Way_to_Invest_Money]

Originally Posted by Surety Wizard

I was just made aware of a company out there that will in fact finance a premium for a bond. They mostly finance insurance premiums but they did in fact finance a premium for a Mortgage Broker Bond. The company has 3 or 4 options for financing and this client was making 4 payments for the bond. The premium is paid up front by the company and they hold collateral to secure repayment of the premium. I guess there is a niche for everyone out there. I suggest an internet search for such companies.

There can be so many money scams out there. Therefore it is better to watch out why they are not following the usual methods of paying premium.

[Surety Wizard]

I agree 100% be careful when researching this type of company. There are many scams out there, but there are a few legitimate companies that will finance premium for insurance. If you have any doubts about a company look them up with the Better Business Bureau.