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New York Collection Agency Bond

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How to Get a New York Collection Agency Bond

New York Collection Agency Bonds Explained

If you want to launch a collection agency business in the state of New York, you have to obtain a license on the city level if you are based in New York City or Buffalo. One of the requirements that you have to meet is to provide a collection agency bond.

The goal of the required bond is to ensure that you will follow all applicable city and state laws in your operations as a debt collector. It works as a safety mechanism protecting your customers and the licensing authorities against potential illegal activities on your side.

The collection agency bond functions as a three-party contractual agreement. Your collection agency is the principal, the relevant city authority is the obligee that demands it, and the surety is the bond provider.

Questions about Collection Agency Bonds in New York

Who has to obtain a collection agency bond in New York?

There is no comprehensive requirement for a New York state debt collection agency license and bonding. The cities of New York C and Buffalo require collection agencies to obtain a city license. This process entails obtaining a $5,000 surety bond for both of those cities. For the City of Buffalo, it ensures compliance with Ordinance Chapter 140. In the case of NYC, the bond guarantees compliance with Subchapter S of Section 1. Chapter 2 of Title 6 of the Rules of the City of New York.

How much does bonding cost?

The surety bond amount that you have to post as a New York collection agency based in New York City or Buffalo is $5,000. However, you don't need to cover the whole amount to get bonded. You only need to pay a small percentage of it, which is the bond premium.

The surety bond cost that you will end up paying is based on a thorough assessment of your personal and business finances. It is needed in order to measure the level of bonding risk involved. The factors that shape your bond price are your personal credit score, business finances, and any fixed or liquid assets that you may have. The stronger your financial profile is, the lower your bond premium would get.

New York Collection Agency Bond Cost Based on Credit Score
Surety bond name Bond amount Credit Score
Above 700 Between 650-699 Between 600-649 Below 599
New York City and City of Buffalo collection agency bond $5,000 $100 $100-$125 $125-$250 $250-$500

* This table provides a ballpark estimate of potential bond costs. Bond pricing can fluctuate over time due to a number of factors. For exact pricing, please complete an application.

Is it possible to get bonded with bad credit?

If you have problematic finances, it can be more difficult to get a collection agency bond. Applicants with low credit scores, tax liens, bankruptcies, and civil judgments can use Lance Surety Bonds' Bad Credit Surety Bonds program to get the needed bond.

The typical rates for bad credit bonds are between 5%-10%. The slightly higher price is necessary in order to mitigate the increased bonding risk. You can still obtain an excellent bond price with us due to our exclusive partnerships with a number of A-rated, T-listed surety companies.

What is the bonding process like?

To get your New York collection agency bond, you can follow these steps:

  1. Complete our online application form (it takes 5min)

  2. You will be contacted with a free, no-obligation quote

  3. The bond can be then bought online

  4. You will receive a digital as well as a hard copy of your bond

Would you like to learn more about the intricacies of the bonding process? You can delve into the details on our How to Get Bonded page.

If you have queries or need help with your application, Lance Surety Bonds' specialists can assist you. You can reach us at (877) 514-5146.

What happens in the case of a bond claim?

If you fail to follow the laws in your city and the common New York state laws, you can end up with a claim against your collection agency bond. Through this, parties who have suffered damages due to your illegal activities can demand fair compensation up to the full amount of your bond.

At first, your surety may cover the reimbursement on proven claims. However, you are liable to fully repay it afterwards, as this is the mechanism of all surety bonds. Thus, it is best to stay away from situations that can create any claims.

Additional Resources

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About Us

Lance Surety Bonds
Lance Surety Bond Associates, Inc. is a Pennsylvania-based surety bond agency that offers bonding at competitive rates in all 50 states. Established in 2010, our company has grown to become one of the top online bond producers in the country. Working exclusively with A-rated and T-listed bonding companies gives us the confidence to offer a 100% money-back guarantee. read more

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What Our Clients Have To Say?

  • Kimberlee Ables
    Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
  • Andrew Poincot
    Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
  • Margie Martinez
    We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!

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