If you have never needed a bond until now you're probably have no idea what a surety bond is.A surety bond is usually required by a state in order to obtain a license. There are thousands of different types of bonds, covering car dealerships to contractors, there's practically a bond for every type of business.
Surety bonds can be dated back to the Mesopotamian days; it's the oldest form of insurance. There is evidence of Individual Surety Bonds in the Code of Hammurabi and in Babylon, Persia, Assyria, Rome, and Carthage.
What does a bond do?
Surety bonds do not protect you, but the obligee. So why do you need a bond if it does nothing for you? The answer is because you have to have one in order to obtain your license. Sometimes the obligee will waive the bonding requirement if you post a cash bond or an ILOC. The problem with doing that is that the state "obligee" may hold on to your collateral until all liability has been released. You are probably asking yourself now how long does that take? The answer is they can hold your collateral until the statue of limitations runs out and there are no statues of limitations on fraud.
How is a surety bond rate determined?
The rate is equated by many factors state, bond type, credit, personal net worth, business net worth and experience.
For license and permit bonds rates are between 1% to 3% if you qualify. For bonds that are considered a financial guarantee rates are between 2% to 3% if you qualify.
What are the qualifications to get a bond?
Qualifications are always evolving a few years ago for many surety bonds under $10,000 the surety didn't run credit now it's a little different. The rule of thumb is if you are applying for a $10,000 bond the surety wants a net worth of at least four times the bond amount and a credit score above a 650. This is not set in stone it differs from surety to surety state to state program to program. [URL=http://www.allsuretybonds.com/surety-bonds/bad-credit-bonds]bad credit surety bonds/URL]