Washington Collection Agency Bonds Explained
Collection agencies in Washington, just like in most other states, have to undergo a licensing process that guarantees their legal compliance. As part of it, you need to provide a collection agency bond.
The bonding requirement is there to ensure that your collection agency business will adhere to all applicable state regulations. It functions as a safety mechanism that protects the state and your customers.
The bond works as a three-party contractual agreement, with your collection agency being the principal. The Washington Business Licensing Service at the state Department of Revenue is the obligee that requires you to get bonded, and the surety is the bond provider.
Questions about Collection Agency Bonds in Washington
Who needs to provide this bond?
Obtaining a Washington collection agency license entails providing a $5,000 surety bond. It has to be posted to the Washington Business Licensing Service as part of your licensing procedure. The bond guarantees you will comply with Chapter 19.16, Title 19 of the Washington State Legislature.
How much does a Washington collection agency bond cost?
The surety bond amount that you have to provide as a Washington collection agency is $5,000. Your bond premium, however, is only a fraction of this amount that depends on your personal and business finances.
Your surety provider examines the strength of your finances in order to determine your exact surety bond cost. The most important factors that shape it include your personal credit score, business finances, as well as any fixed or assets you may have. This is how your bonding risk is calculated. You will get a lower bond cost if your overall profile is strong.
|Washington 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|
|Washington collection agency bond||$5,000||$100||$100-$125||$125-$250||$250-$500|
Can I get bonded with bad credit?
In short, yes you can, but it is more difficult to get a collection agency bond if your finances are problematic. You can use Lance Surety Bonds' Bad Credit Surety Bonds program if you are facing issues such as low credit scores, tax liens, bankruptcies, and civil judgments.
You can expect bad credit bonding rates in the range of 5%-10%. This is a necessary bump due to the increased bonding risk. Because of our collaborations with the top A-rated, T-listed surety companies, you can still get an excellent bonding option with us.
How do I obtain this bond?
To get a Washington collection agency bond, you can follow these steps:
We will send you a free, no-obligation quote
You can then buy the bond online
You will receive a digital and a hard copy of the bond
Interested in delving into the details of the bonding process? You can explore the in-depth How to Get Bonded page.
If you have questions or need help with your application, Lance Surety Bonds' specialists can help. You can reach us at (877) 514-5146.
What happens in case of a bond claim?
You can receive a claim against your Washington collection agency bond if you fail to follow state laws. If a party suffers damages due to your unlawful actions, they can seek reimbursement to cover any damages. The maximum sum they can demand is the bond amount, which is $5,000.
On proven claims, you have to cover the costs to compensate the claimant. While the surety may at first pay them, you are fully liable to repay it afterwards. This means it is best to avoid any bond claims, as they can seriously hurt your collection agency.