What Is a Check Casher Bond?
If you’d like to provide check cashing services, a number of states would require you to obtain a license and a surety bond. In this way, the relevant authorities ensure you are suitable for the job.
Your check casher bond is a type of license bond. It is required in order to provide an extra layer of protection for your customers against potential fraud and misuse on your side. Harmed parties can demand a compensation by bringing a claim against your bond.
In essence, the bond is a three-party contractual agreement. Your check cashing business is the principal that has to obtain the bond. The obligee is the state authority that imposes the requirement. The surety is the entity providing the bonding.
Questions about Check Casher Bond
Which states require check cashers to obtain a surety bond?
As set in the Mississippi Check Cashers Act, check cashers in the state have to obtain a $10,000 surety bond. There is an official bond form to use. It has to be presented to the Mississippi Department of Banking and Consumer Finance when applying for a state license.
Check cashing service providers in Nevada have to get licensed with the Department of Business and Industry. They have to obtain a surety bond in an amount set by the Department and provide it in the official bond form.
In Georgia, check cashers who receive payment instruments with payment deferred pending collection have to obtain a $10,000 surety bond. They have to provide it to the state Department of Banking and Finance.
Check cashers in Kentucky need to post a surety bond in an amount set by the state Department of Financial Institutions. This is an indispensable step in the licensing process.
In the District of Columbia, check cashers need a $5,000 surety bond in order to obtain their lciense.
What is the check casher bond’s cost?
The bond amount is the required bond as set by the state authorities which handle the licensing process for check cashers. You have to cover a small percentage of it, called the bond premium. It is formulated on the basis of your finances. Typically, it is between 1% and 5% of the bond amount.
How exactly is your surety bond cost set? Your surety considers a couple of important factors, including your personal credit score, business financials, and assets and liquidity. It has to assess the strength of your profile, so that it can measure the bonding risk. You can expect to pay less for your bond if your overall application is strong.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Mississippi and Georgia||$10,000||$100-$150||$100-$250||$250-$500||$500-$1,000|
Can I obtain this bond with bad credit?
Yes, you can get bonded with us even if your finances are not perfect. Lance Surety Bonds has designed and runs its Bad Credit Surety Bonds program for applicants with financial issues such as low credit scores, tax liens, bankruptcies, and civil judgements.
The rates in this bonding program are between 5% and 10%. The premiums are higher since they have to compensate for the increased bonding risk. Due to our close collaboration with numerous A-rated, T-listed surety companies, you can expect a top bonding option with us, whatever your credit score is.
How do I get my check casher bond?
Would you like to learn more about the way bonding works? We have prepared a detailed How to Get Bonded page for further details.
Still have questions? We're here to help. Contact us at (877) 514-5146 to get assistance from one of our bonding experts.
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