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Bond Qualification Problems - What Should I Do?

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Many have asked us: "I've had my surety bond for years. Now, I can't qualify to renew it. What should I do?" Here's the answer.

Published in: Business, Economy & Finance
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Bond Qualification Problems - What Should I Do?

  1. 1. I’ve had my Surety Bond for years and now I can’t get approved. What can I do?<br />
  2. 2. Why is this Happening?<br />New bonding requirements by the states.<br />Economy downturn has tightened qualification standards.<br />
  3. 3. What Hurts Bond Qualification?<br /><ul><li> Reduced Credit Score
  4. 4. Stricter Underwriting Guidelines
  5. 5. Loss of Assets
  6. 6. Previous Bond Claims</li></li></ul><li>“But I’ve Had this Bond for Years”<br />Every year, renewal has been easy. Why now with the headache?<br />
  7. 7. Guess what . . . <br />It’s not your fault.<br />It’s time for action.<br />
  8. 8. What We Recommend . . .<br />Broaden your search for someone to write the bond.<br />
  9. 9. What We Recommend . . .<br />All insurance companies have agency minimums.<br />If you’re problem is credit, you need an <br />agent who can write sub-standard business.<br />
  10. 10. “Sub-Standard” Explained.<br />Sub-standard agencies write bonds at <br />higher premiums based on credit.<br />They may require:<br /><ul><li> a Bank Letter of Credit (LoC)
  11. 11. Cash Collateral
  12. 12. Personal Promissory</li></li></ul><li>Bank Letter of Credit - LoC<br />A Letter of Credit is essentially a <br />document:<br />- Issued by a bank<br />- Guaranteeing your financial obligation.<br />
  13. 13. Cash Collateral<br />Cash Collateral refers to you posting<br />cash that can be returned after a credit<br />score increase or 1-2 years of a good <br />‘track record’.<br />
  14. 14. Personal Promissory<br />Bonds issued off of your business’<br />financial health may require the owner<br />to personally back the bond.<br />
  15. 15. Does this solve the problem?<br />It can.<br />You can get your bond with a larger <br />agency, who has sub-standard providers.<br />Don’t ignore this - Get bonded.<br />
  16. 16. Our Takeaways . . . <br />Broaden your search.<br />Talk to more agencies.<br />Seek out Sub-standard options.<br />
  17. 17. Produced by the SuretyBonds.com Education Center<br />www.suretybonds.com/edu<br />www.suretybonds.com/blog<br />

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