Maryland Collection Agency Bonds Overview
Collection agencies in Maryland need to undergo a rigorous licensing process prior to launching operations in the state. Providing a collection agency bond is among the essential requirements you have to fulfill if you want to launch your business.
Why is the bonding needed? By including this licensing criterion, state authorities aim to ensure a higher level of protection for the general public. The bond serves a safety mechanism in case you fail to follow your legal obligations.
The bond that you obtain functions as a contract between your collection agency as the principal, the Maryland Department of Labor, Licensing and Regulation as the obligee, and the surety that provides the bond.
Questions about Collection Agency Bonds in Maryland
Who is required to obtain a collection agency bond in Maryland?
If you want to launch a collection agency in Maryland, you have to obtain a license from the Department of Labor, Licensing and Regulation. One of the requirements is posting a surety bond of $5,000, which may in some cases be increased to a larger amount. As in other states, the licensing process for collection agencies is conducted via the Nationwide Multistate Licensing System and Registry (NMLS) website. The bond guarantees you will follow applicable rules and regulations, including the Maryland Code.
How much does it cost to get a collection agency bond in Maryland?
In order to obtain a Maryland collection agency license, you have to post a $5,000 surety bond. This is the bond amount required, which is different from your surety bond cost. It is only a fraction of the amount and is also referred to as the bond premium. In case you can demonstrate strong financial stats, you are likely to get a rate between 0.75% and 5%.
Your personal credit score, business financials, and liquidity and assets are the main factors that determine the bond cost that you have to pay to get bonded. The surety that you apply with has to assess them as indicators that showcase your financial and business strength. This is needed because of the inherent bonding risk. The more stable your finances are, the lower price you’ll get for your bond.
|Surety bond name||Surety bond amount||Credit Score|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Maryland collection agency bond||$5,000||$100||$100-$125||$125-$250||$250-$500|
Is it possible to obtain this bond with problematic finances?
With Lance Surety Bonds, you can get the collection agency bond that you need for your licensing despite your financial difficulties. We run our Bad Credit Surety Bonds program to give a bonding option for applicants with low credit scores, tax liens, bankruptcies, and civil judgements.
We work with numerous A-rated, T-listed surety companies, which allows us to access a wide variety of bonding programs. Thus, even though the bad credit bond rates are between 5% and 10%, you can still get a top price with us.
How can I get bonded?
To obtain a collection agency bond in Maryland, you need to follow the steps below:
Receive your free, no-obligation quote
Pay for your bond online
Receive your collection agency bond (digital and a hard copy)
For further details about the way bonding works, you can consult the extensive guide on our How to Get Bonded page.
Lance Surety Bonds’ specialists are available to assist you with any queries you may have. Just call us at (877) 514-5146.
What happens in case I receive a claim against my bond?
Since your collection agency bond is not insurance for your business, you can get a bond claim if you transgress from the Maryland Code and other applicable laws. If a party suffers damages due to your unlawful actions, they may seek a compensation up to the penal sum of your bond, which is $5,000.
On proven claims, your surety can step in to cover the costs at first. This ensures the claimant gets a quick reimbursement. Still, all payments have to be covered by you soon after, as set in the bond indemnity agreement. Thus, the wisest course of action for your business is to stay away from claims.