What Is a Virginia Credit Services Business Bond?
Are you considering launching a Virginia credit services business? You will need to undergo state registration that entails providing a credit services business bond.
The surety bond that you obtain as a part of the process aims to safeguard the interests of the state and of your customers. It guarantees that you will abide by all applicable rules and regulations.
Similarly to other bonds, your credit services business bond functions like a contract between three parties. The principal is your credit services business that needs the bonding. The Office of Charitable and Regulatory Programs at the Virginia Department of Agriculture and Consumer Services is the obligee. The third entity is the surety that provides you with the bonding.
Questions about Credit Services Organization Bonds in Virginia
In which cases do I have to get this bond?
All credit services businesses in Virginia have to register with the Office of Charitable and Regulatory Programs at the state Department of Agriculture and Consumer Services. It requires all registering entities to provide a surety bond.
There is an official bond form that you have to use when submitting your bonding. The bond guarantees that you will follow the Virginia Credit Services Businesses Act.
How much does a Virginia credit services business bond cost?
In order to start your Virginia credit services business, you have to post a bond between $5,000 and $50,000. The exact bond amount should be equal to 100 times the standard fee that you charge for your services. Your bond premium, on the other hand, is the actual bond price that you have to pay. It is only a few percents of the required amount and is usually between 1% to 5% for applicants with stable finances.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Virginia credit services business bond||$5,000 to $50,000||$100 to $375-$750||$100-$125 to $500-$1,250||$125-$250 to $1,250-$2,500||$250-$500 to $2,500 to $5,000|
The surety bond cost is based on a number of financial factors that your surety has to consider. The most essential ones are your personal credit score, business finances, assets and liquidity, and professional experience. The more solid these criteria are, the smaller the bonding risk that you present is. This means you will also get a lower bond price.
What happens if I have problematic finances?
Applicants struggling with a low credit score, bankruptcies, tax liens, or civil judgements can make use of our specially designed Bad Credit Surety Bonds.
You can get bad credit bonding at premiums in the range of 5% to 10%. As the bonding risk is increased, the rates are also slightly higher to compensate for it. Lance Surety Bonds works with numerous A-rated, T-listed surety companies, so we can still find the best bonding option for your specific circumstances.
What is the bonding process like?
Seeking more information about the bonding process? Look no further. We’ve prepared an in-depth resource on the topic, which you can find on our How to Get Bonded page.
Our bonding experts are here to assist you. Just call us at (877) 514-5146 to get help with your bond application or questions.
What happens in case I get a bond claim?
Your Virginia credit services business bond does not protect your company but rather provides a safety net for your customers. In case you engage in fraudulent, misleading, or illegal activities which result in damages for a party, a claim can be made against your surety bond.
Claimants can seek a reimbursement up to the penal sum of your bond, which is between $5,000 and $50,000 in this case. While the surety may step in to make the payment at first, you have to compensate it in full. This is the rule according to the bond indemnity agreement.
That’s why it’s best to avoid situations that can lead to claims, as they can harm your business and reputation.
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