Learning how surety bonds benefit your business now now will allow you to use bonding to your advantage later on.
Bonding promotes successful enterprises in three key ways:
- By holding business owners to higher industry standards
- By keeping unqualified individuals from gaining access to certain professions, thus limiting competition
- By strengthening consumer confidence
Surety bonds allow consumers to hold business owners accountable for their professional performance. Consumers can avoid losing money at the hands of dishonest business professionals by making a claim against their bonds.
For example, say an auto dealer used fraudulent selling tactics and a claim was made on the bond. The surety would use the bond’s funds to pay the claim.
Since surety providers can choose not to bond risky applicants, this infraction could keep the auto dealer from getting a bond in the future. Without the bond, the auto dealer cannot get a license to operate legally, which, in turn, protects consumers from encountering a similar situation in the future.
On the flip side of this discussion, getting bonded also strengthens consumer relations. The bonding process requires a neutral third party (the surety) to verify a principal’s financial stability. When a company is licensed and bonded, consumers know it has met the strict financial guidelines required for getting a bond. Furthermore, your customers will feel confident knowing your business has the financial guarantee of a bond.
One of the biggest benefits of having surety bond knowledge is being able to get through the application process quicker and easier. When planning to start a new business, you have plenty of time-consuming concerns stressing you out. Don’t let bonding be one of them.