Skyrocketing Surety Bond Premium!!!

I had my bond with the same surety since I opened in 1999. My premium WAS $375 for my $50,000 CA dealer bond. The bonding company dropped me for my renewal this year so I began looking for someone to write my bond. I have good personal credit, but I am having trouble finding someone to write my bond for me at a reasonable price. I need to have a new bond in place by 5/1/05, please help!

[Admin]

Janet, in general bonding companies look for the following: good personal credit (above 670), home equity, profitable business financials (if it is an exisiting business), and a bond form that is agreeable to (standard clauses).


The CA bond form has both mid-term and aggregate clauses, which are the two main items any surety will look for on a commercial bond form. Therefore the state's bond form is not your problem.

You state you have good credit, but "good" is a relative term...Is it above 670? The sureties are very conservative right now. I often hear people claim they have good credit and they try to validate it by saying they were just approved for a mortgage, which is comparing apples and oranges. And let me just say it is harder to get approved for a surety bond than a mortgage right now.

You stated that your business has been open since 1999, is it showing a profit? Do you have business financials (profit & loss and a balance sheet) for the most recent fiscal year end? Your previous surety may have dropped you do to your most recent financial statement or a failure to produce one.

If your business is not very profitable, but not showing a loss then it can be based on your personal financials. In this case you would need to show home equity at least twice the bond amount.


What I am trying to get to is there are literally hundreds of reasons why you were dropped or can not currently obtain a bond. What I can tell you is that I am 99.9% sure our agency can have you approved within 1-3 business days. However I can guarantee you will not be seeing rates of $375 for a $50,000 dealer bond. That was the bond rates of years past and no longer apply, it seems that you lucked out for a couple years and your previous surety was applying older rates. Currently, the lowest rates would be 1% bringing your annual premium to $500. However, we will not know what your unique companies rate will be unless you apply. There are simply to many factors that can change the rates.

You can apply using our online applications at the following link: Dealer Surety Bond Application Some of our programs will even give you an approval and a quote immediatly upon applying online.

Let me know if there are any further questions you have.