What Is an Arizona Credit Services Organization Bond?
Credit services organizations in Arizona are required to undergo a licensing process before being allowed to function. Posting a credit services organization bond may be needed in case you want to change or receive monies before fully completing a contract with a customer.
The goal of your surety bond is to ensure that you will comply with all applicable state regulations. It can provide a compensation two any parties that suffer damages due to potential illegal activities on your side.
Your surety bond, in essence, a contract between three parties. Your credit services organization business is the principal. The Arizona Corporation Commission is the obligee that you need to file the bond with. Finally, it is the surety that provides the surety bond for you.
Questions about Credit Services Organization Bonds
When am I required to get bonded?
Credit services organizations in Arizona that want to charge or receive monies or other valuables before complete performance of services they have contracted for have to obtain a surety bond is. The requirement is set in §44-1703, Title 44 of the 2017 Arizona Revised Statutes. The bond ensures your full legal compliance.
How much does bonding cost?
The surety bond that you may have to post should be between $5,000 and $25,000. The exact amount is set on the basis of the contracts you’ve entered in the previous 12 months.
The bond amount affects the price you have to pay. However, the actual cost is only a small percentage of it. It is called the bond premium. If your overall finances are in good shape, the usual rates are between 1% and 5%.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Arizona credit services organization bond (for changing or receiving monies prior to completing a contract)||$5,000 to $25,000||$100 to 187.5-$375||$100-$125 to $250-$625||$125-$250 to $625-$1,250||$250-$500 to $1,250-$2,500|
How exactly is your surety bond cost set? It is based on a number of financial factors, including your personal credit score and business finances. Your surety may also consider any assets and liquidity that you can showcase. By examining your finances, it can assess the level of risk associated with bonding you. You will get a lower bond price if your profile is solid.
Can I get an Arizona credit services organization bond with bad credit?
If you are facing financial issues such as a low credit score, bankruptcies, tax liens, or civil judgements, you can still get bonded with us. Lance Surety Bonds runs its Bad Credit Surety Bonds program to allow applicants struggling with finances to still get the bond they need.
If you need a bad credit bond, you can expect a rate in the range of 5% to 10%. This is needed, as the bondng risk is higher. As we work with a number of A-rated, T-listed surety companies, we can still offer you a top bonding price, whatever your credit score is.
How do I get bonded?
Would you like to learn more details about the way bonding works? You can consult our in-depth How to Get Bonded page.
In case you have further questions, or need help with your application, we are here to assist you. Just call us at (877) 514-5146 to speak to one of our bonding experts.
What if I get a bond claim?
Unlike insurance, your surety bond does not protect your Arizona credit services organization. Instead, it protects your customers from potential unlawful activities you may engage in. A harmed party can file a bond claim against you to seek a fair compensation.
The reimbursement can be up to the penal sum of your bond, which is between $5,000 and $25,000 in this case. Initially, it may be your surety that takes over the costs. However, as per the bond indemnity agreement, you are fully liable for the payments. Thus, surety bond claims are a serious financial threat to your business. It’s best to avoid them, as they can create obstacles for your business in the future as well.