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How to Obtain a Surety Bond

How to Obtain a Surety Bond

Do you need a surety bond? Viking Bond Service can explain how to obtain a bond, help prepare the necessary paperwork and consult you on any additional questions you might have; we are a leading provider of surety bonds throughout the US. Our friendly and efficient team can help make the process of obtaining a surety bond quick, easy, and understandable.

How to Obtain a Surety Bond: the Key Parties Involved

There are three parties involved in obtaining a surety bond:

  1. The principal, (you) is the person obtaining the bond
  2. The obligee, is the individual or entity that requires the bond
  3. The surety, is the underwriter who issues the bond

How to Obtain a Surety Bond From Viking Bond Service

Viking Bond Service provides many types of surety bonds, including both contract and commercial bonds. We offer three ways to start your surety bond application process – via our contact form, on the phone, or through our online application process. These bonds can often be issued instantly upon receipt of the signed application and bond fee. We will make obtaining the necessary surety bonds easy for you.

A Step By Step Process of Obtaining a Surety Bond

  1. Knowing where to obtain a surety bond is the first and most important step. Make sure to find a quality surety provider to work with. There are many to choose from, but not all of them are created equal. Some will try to charge your exorbitant premiums. Others will drop the ball in terms of service and support. If you can't spend the time considering dozens of different options (or simply don't want the hassle), rely on Viking Bond Service – a nationwide surety broker capable of finding you the best bond available.
  2. No matter who you decide to work with, contact that company before doing anything else. Representatives can tell you exactly what to do when applying for the specific kind of bond you need. Different bonds can have widely different application requirements, so make sure you follow the guidance of the surety bond specialists. You will save time and headaches by checking first. A surety bond agency will answer your questions and provide you with more information. That's important because you won't want to continue with the surety bond process until you understand exactly what it involves.
  3. Apply for the surety bond by completing a standard application. Bond companies base the premium price on the applicant's credit risk, so they use the application to explore things like your credit score and your financial history. You may also need to supply supporting documentation. With court bonds, for instance, you need to turn over a copy of the court order requiring the bond. It's less common, but you may also need to put up collateral to secure the bond. Viking Bond Service will explain everything you need to know about how to apply for a surety bond correctly.
  4. With the information you supplied, underwriters at the surety will calculate the amount you will pay to activate the bond (typically for one year). Keep in mind that two people applying for the same bond may pay drastically different premiums because of their credit history. After arriving at a figure, the surety company will quote you a price. At Viking Bond Service, most applicants received a quote within 24 hours of applying. You have no obligation to accept the offer, and there is no fee for the quote.
  5. The bond activates after you pay the premium price. That means you've met the bond requirement. However, it also means you're subject to the terms and conditions of the bond. The surety will give you a document you can provide to the obligee to make things official.
  6. If you need a bond permanently, which is often the case for professionals and businesses, you must know how to get a surety bond renewed. In most cases, renewing your surety bond is as simple as paying the premium for the next bond term, typically a year. In some instances, the surety may want to review credit and financials before renewing. For some who have experienced improvements in credit or financial standing, the bond can also be reviewed for a lower rate and/or better terms. This process is similar to obtaining a surety bond and will require a new application and supporting documentation.

How Long Does It Take to Get a Surety Bond?

A bond can sometimes get approved on the spot, but other times can take between one and four business days. Once approved, bonds are normally issued a day or two after the agency receives payment and any other paperwork the surety requires to release the bond.

Surety Bond Rates

The cost of obtaining a surety bond will depend on the amount of coverage and the type of bond that you need, the quality of credit, and (in some cases) financial information. To give you an idea, usually premiums range anywhere between 1-15% of the total bond amount. The only accurate way to get the rate for your specific request is to obtain a quote. Once sent, an underwriter will take all the variables into consideration and offer a corresponding rate. At Viking Bond Service, if your initial rate is high due to poor credit, depending on the bond type, we can review updated credit and/or financials again during bond renewal. If there is sufficient improvement, our renewal department can search for more favorable rates and terms.

As for the surety bond process, agencies usually require premium payment upfront and in full. This must be paid before the agency signs the bond with the principal. Viking provides bonding through all major Sureties using A-Rated, Treasury Listed paper. This means we can do the shopping for you and show you their most competitive quotes.

Obtaining a Surety Bond With a Bad Credit Score

Here is where your choice of a surety bond agency is key. Many agencies deny bond applicants with bad credit, viewing them as too big a risk to take a chance on. But there are companies out there willing to work with applicants with low credit scores or even a bankruptcy on their record. If this is the case, you will likely pay slightly higher premiums but will not be denied outright, making it possible to fulfill the bond requirement necessary to obtain a professional license or seal a contractual relationship. To locate a surety willing to partner with applicants who have bad credit, work with a nationwide surety brokerage like Viking Bond Service.

Request a Surety Bond Quote From Viking Bond Service, Today

Viking Bond Service is made up of experienced and knowledgeable bond specialists who are here to help you find an affordable surety bond. For advice on how to obtain a surety bond please call 1-888-2-SURETY (1-888-278-7389) or email our team. Start your application now using our online application form!

Who is Eligible for a Surety Bond?

Every state has different requirements for eligibility, but things like poor credit scores or history of criminal activity are among the most common reasons someone might be denied a surety bond.

So, what happens if you don't qualify? Keep looking for a surety bond agency. If you haven't qualified in one, you might still go through in another. Viking Bond Service has a bad credit surety program for those who could potentially be denied.

How to Keep A Surety Bond

Once you get a surety bond, you may need to keep that bond into perpetuity. This is true for many professionals who need a surety bond to get a license (like plumbers) or operate a business legally (like motor vehicle dealers). If these professionals don't have an active surety bond, it could render their license invalid and expose them to serious legal and financial risks.

Most bonds remain active for 12 months, but the surety bond agreement may establish a different length of time. Past the expiration date, the bond protections lapse, meaning the surety agency will not settle claims on behalf of the principal. Bond renewal prevents that from happening. Renewing a bond before the expiration date ensures seamless bond protections, which are legally required for many professionals and businesses.

Renewing any type of surety bond works very similar to the initial application process. The bonded party will need to fill out a standard bond application with information about their business, background, and any partners they have. They will also need to submit to a credit check. Underwriters re-evaluate an applicant's risk every time they renew a bond. If your credit score has gone up or down since the last time you renewed the bond, your premium may go in the same direction. Keep this in mind when budgeting for yearly surety bond costs. And use it to your advantage since improving your credit score can lower your overall bond costs.

When you obtain a surety bond for the first time, work with a surety agency to explore how the renewal process works and when it will ramp up. The more you understand what lies ahead, the better your bonding experience will be. A good surety agency will be happy to walk you through every step of the process for how to obtain a surety bond - and then explain exactly how renewal works. Later, they will alert you about the need to renew long before it's necessary so that your bond protection doesn't accidentally lapse. To put it simply, a great surety agency makes bonding easy for you. Count on Viking Bond Service to go above and beyond.

Viking Can Assist With ANY Type of Surety Bond

Viking Bond Service, Inc. has the necessary Surety relationships that enable us to assist with any type of surety bond. We are able to assist with Contract Bonds of all amounts, Judicial/Court, Financial Guarantee, License and Permit, as well as other miscellaneous bond types. We are also able to assist with any Fidelity Policy requests. Regardless of type, Viking provides fast quotes, competitive rates and friendly service.

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