Sales Finance Company Bond Overview
Some states require companies who offer installment rate contracts for large purchases to get a sales finance company bond. Learn how these bonds work and find the one you need in this complete guide.
- Purpose: To ensure companies offering installment sale contracts follow state regulations and conduct business ethically
- Who Needs It: Sales finance companies in some states
- Required Amount: $10,000–$25,000, varies by state
- Premium Rates: Depends on the required amount; typically $100–$250
Learn all about the bonding process in this guide.
What Are Sales Finance Company Bonds?
Sales finance company bonds are a type of license and permit bond required by some states to ensure business is conducted ethically and lawfully.
The bond guarantees that sales finance companies — usually motor vehicle dealers financing car loans — will comply with all state regulations.
How Much Do Sales Finance Company Bonds Cost?
Sales finance company bonds vary in price, depending on the total bond amount. Some bonds are credit-based, but most are instant issue with a flat 1% premium. For example, you will pay $250 for a $25,000 bond with a 1% premium.
Select your state below to find more information about sales finance company bonds requirements in your location.
How Do Sales Finance Company Bonds Work?
A sales finance company bond is a legal contract between three parties:
- Principal: You, the sales finance company owner(s) purchasing the bond
- Obligee: The government entity requiring the bond
- Surety: The provider issuing the bond
If you act deceptively or are fraudulent, the surety will pay out valid bond claims to harmed parties. Then, you are expected to reimburse the surety.
Who Needs a Sales Finance Company Bond?
Companies who offer sales financing contracts for large purchases need a sales finance bond in several states. The most common business type that needs sales finance company bonds is motor vehicle dealers who provided lending options for vehicle purchases.
How to Get a Sales Finance Company Bond
SuretyBonds.com provides the fastest and easiest way to get a sales finance company bond. Just follow these quick steps:
- Select the state/bond you need
- Buy instantly or apply for a quote
- Receive your bond via email or physical mail
- File your bond with the obligee
For New Hampshire and Michigan sales finance company bonds, we’ll upload the bond directly to the NMLS on your behalf.
How Do I Renew My Sales Finance Company Bond?
Sales finance company bonds expire annually. When the time comes, a SuretyBonds.com representative will contact you about the renewal process.
Refer to our Surety Bond Renewal Guide for more information.
How Do I Update My Sales Finance Company Bond Form?
You can often update simple information on your bond through a bond rider. This is the only legal method of updating without invalidating the original bond.
If you need to update any bond information, contact our support team by calling 1 (800) 308-4358 or emailing [email protected].
Can I Get Bonded With Bad Credit?
Yes, most sales finance company bonds are issued without underwriting and do not require a credit check.
If your bond does require underwriting review, SuretyBonds.com approves 99% of all applicants with our bad credit bonding options. Read Getting Bonded With Bad Credit to learn more.
