How Much Does a Freight Broker Surety Bond Cost?
The cost of a freight broker bond can vary from $750 - $9,000, and pricing is based on the factors listed below:
- Personal credit
- Years of experience
- Current or previous bond claims
- Business financials
Freight broker bond costs (also known as the premium) are a small percentage of the required $75,000 bond amount, and is usually around 1-12%.
Due to the various factors that affect the pricing, it's recommended that you apply for a firm quote to ensure all of the critical information about your company is available to calculate a firm price.
How to Lower Your Freight Broker Bond Costs
A freight broker bond is an expense that many brokers don't think they can afford, but there are a few ways you can significantly lower your bond costs for your brokerage.
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.
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.
Obtain Strong Experience and Financials
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.
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.
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Freight Broker E-Book Guides
You can take a look at some of our free freight broker guides below, which cover the most important information you'll need to know as a freight broker. Take a look at the topics covered in our e-book guides below:
- How much it costs to become a broker
- How to get your authority
- The importance of training
- How to get the proper training
- How to leverage/find the right load boards
These e-book guides were created specifically with freight brokers in mind, and provide all of the crucial information you need to help ensure your brokerage thrives in this competitive profession.