Often businesses in New York City need to get a surety bond in order to operate legally. The license bonding requirement is typically enforced by state authorities in New York, but in some cases it can also come from a city or federal authority as well.
Most Popular Surety Bonds in New York
Used car dealers and franchised dealers in the state of New York, including New York City, have to get licensed with the New York State Department of Motor Vehicles. The bond amount for used car dealers is $20,000 for selling up to 50 cars per year, and $100,000 for selling more than 50 vehicles. For franchised dealers and dealers of larger vehicles, the bond requirement is $50,000.
Nail salons in the state of New York have to post a nail salon wage bond in order to get licensed. The licensing authority is the Department of State, Division of Licensing Services. Nail salon owners have to obtain a bond between $25,000 and $125,000, depending on the number of employees in their company.
Home improvement contractors in New York City are required to get licensed with the New York City Buildings Department. They have to post a $20,000 contractor license bond as a part of the process.
Debt collection agencies that collect child support payments in NYC have to post a bond with the New York City Department of Consumer Affairs. The bond amount is $5,000, but may be increased up to $25,000.
Freight brokers across the U.S. have to get licensed with the Federal Motor Carrier Safety Administration. The bond requirement is in the amount of $75,000.
Overview of NYC surety bonds
Surety bonds in NYC function just like other surety bonds. They are a contractual agreement between three parties. Your business or yourself is the principal. The city, state or federal authority that requires the bonding is the obligee. The third party that provides the bonding is the surety. The purpose of the bonding is to ensure that you will follow all applicable regulations and will complete your obligations to the highest professional standards.
The most common NYC surety bonds, as illustrated above, are license bonds. They are required from all types of businesses prior to getting licensed. Some of the industries that have to post a bond include auto dealers, mortgage brokers, and nail salons.
Besides popular license bonds, New York City businesses and individuals may also need to post a contract bond or a court bond. Construction professionals have to obtain contract bonds when bidding for projects. Court bonds may be needed when an individual operates as a fiduciary for another person, or when an appeal case has to be brought to a court.
NYC surety bonds can provide a compensation to affected parties if the bonded principal fails to abide by the rules. The claimant needs to file a claim against the bond. The reimbursement can be up to the penal sum of the bond.
Need more information about NYC surety bonds? You can always contact our bonding specialists at (877) 514-5146 for further help.
Frequently Asked Questions
How much does an NYC surety bond cost?
The surety bond price that you have to pay for your NYC bond depends on the bond amount you have to post. To get bonded, you need to pay a bond premium. It is a small percentage of the bond amount. For many types of bonds, the premium can be as low as 1%-5% of the bond amount.
Your bond cost is formulated on the basis of your personal and business finances. When you apply with a surety, it has to examine your personal credit score, business financials, and your liquidity and assets. In this way, it can determine the level of risk in bonding you. If your overall finances are solid, you can expect a lower bond premium.
Have more questions about your bond cost? You can consult our surety bond cost page.
Can I get an NYC surety bond with bad credit?
Lance Surety Bonds operates its Bad Credit Surety Bonds program to help NYC applicants with low credit scores, tax liens, bankruptcies, or civil judgements get the bond they need. Bad credit bonding is available for most bond types, except for contract bonds.
Often the bad credit bonding premiums are in the range of 5%-15%. The higher cost is needed to compensate for the increased bonding risk. Our agency fosters close partnerships with numerous A-rated, T-listed surety companies, which allows us to provide you with a top bond rate even if your finances are not perfect.
How do I get bonded in NYC?
Ready to start your bonding process in NYC? You can apply online for a free, no-obligations bond quote. Your exact price will be available once you complete the full application and send us your paperwork.
For more information on how bonding works, you can consult our How to Get Bonded page. If you need further answers, just call us at (877) 514-5146. Our bonding experts are here to help you.