If you need a surety bond, you'll be expected to pay the premium before you get it. But what happens if you can’t afford the entire premium upfront? You can get premium financing! This can be especially helpful for applicants whose current credit adversely affects their surety bond premium.
How does premium financing work?
Financing allows applicants to break up one large up-front, payment into smaller, more manageable payments. It works as a three-party agreement between the person or company getting the bond, the finance company issuing the loan and the insurance company underwriting the bond.
Premium financing is only available for bonds that may be canceled by the surety, meaning there's no risk of default if a payment is missed. The finance company will simply cancel the plan and get its money back.
How much does premium financing cost?
Applicants who qualify for premium financing must pay 40% of their total premium prior to having their bond issued with the remaining 60% to be paid in small monthly installments over the following four to six months.
Why do surety companies provide premium financing?
Surety companies offer premium financing because they know you need your bond now. This means your bonding needs can be fulfilled in a timely manner. Even if you don't have the necessary funds at your disposal right now, you can still get your bond right away.
Still have questions?
Give us a call at 1 (800) 308 4358 between the hours of 7 a.m. and 7 p.m. CST Monday through Friday to speak with one of our surety experts!