How To Cut Your Freight Broker Bond Costs in Half
Fix Your Credit Issues
Your personal credit is the main thing that is used to determine your freight broker bond price, so you'll want to ensure you pay off judgments, collections, liens or past due child support that you may have lingering on your credit report. If you don't clear negative items off of your credit report, your bond price will increase significantly. Why? When the surety company provides a bond, they are giving you a form of credit by guaranteeing that you'll operate your brokerage according to FMCSA regulations. With negative items listed on your credit report, the surety company will view you as an increased surety credit risk simply because it's a bad indication of how you'll operate your freight brokerage.
Save Money with the Right Bond Agency
Costs for your freight broker bond can vary drastically depending on the company you work with. Many companies will require you to provide detailed personal and business financials when applying for freight broker bonds, which can cost you roughly $2,000 - $5,000 in CPA fees; the same agencies will often require you to post thousands of dollars in collateral too. Read our article to find how we don't require financials or collateral and why our agency writes more freight broker bonds than anyone in the country.
Become a U.S. Citizen
If you're not currently a U.S. citizen, it will greatly lower your bond costs if you become one. Once you become a citizen, it shows that you're planning on operating your freight brokerage for the long term and aren't a fly-by-night business. If you aren't a U.S. citizen, you will be looked at as a higher risk since you have no physical ties to the U.S. to ensure you stay in the country to pay off any potential bond claims that you cause.
Strong Experience and Financials Lowers Your Rate
The more years you've been operating your freight brokerage, the lower your bond costs will be as long as there are no credit issues. Having strong industry experience and operating an established business can reflect positively on you when a surety company is reviewing whether they will vouch for your company with a surety bond. Although business financials are not required by our agency, providing strong financials shows that you run your business profitably and know how to manage all of the financial obligations that come along with it, lowering your bond pricing.
Author: Eric Weisbrot
Eric is an industry expert that specializes in taking complex surety concepts and explaining them in terms that make sense to the general public. He also manages the JW Surety Bonds website and works with various partners to help further educate the public on suretyship using various mediums.
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