Tennessee Credit Services Business Bonds Explained
Credit services organizations in Tennessee have to go through a registration procedure in order to operate legally in the state. If you want to launch your business, you need to provide a credit services organization bond.
The bond provides a safety net for the state and your customers. It guarantees that you will follow the law in your activities as a credit services business.
Designed as a three-party contract, the bond sets your business as the principal. The obligee is the Tennessee Department of Commerce and Insurance, which requires you to get bonded. The surety is the bond provider that backs your company.
Questions about Credit Services Organization Bonds in Tennessee
When is this bond required?
If you want to get a Tennessee credit services business registration from the Division of Regulatory Boards at the state Department of Commerce and Insurance, you have to provide a $100,000 surety bond. It is an indispensable requirement for all applicants. The bond ensures your compliance with all applicable laws, including the Tennessee Credit Services Businesses Act.
What is the surety bond cost?
In order to obtain your state registration, you have to provide a $100,000 surety bond. This is the bond amount required by law. You have to pay a fraction of it, called the bond premium.
The exact surety bond cost depends on your personal credit score, business finances, and any fixed and liquid assets you may showcase. Your surety has to examine these factors in order to determine the bonding risk that you pose. The lower it is, the smaller your bond premium would be. The typical rates for applicants with solid finances are between 0.75% and 5%.
|Tennessee Credit Services Business Bond Cost Based on Credit Score|
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Credit services business bond||$100,000||$750-$1,500||$1,000-$2,500||$2,500-$5,000||$5,000-$10,000|
Can I get bonded with bad credit?
Getting a credit services business bond with bad credit can be more difficult. However, you can use Lance Surety Bonds' Bad Credit Surety Bonds program. It is designed for applicants with low credit scores, tax liens, bankruptcies, and civil judgments.
The rates for higher risk bonds are between 5% and 10%. As we collaborate with numerous A-rated, T-listed surety companies, we can still offer you the most appropriate bond option for your circumstances.
How do I get my bond?
In order to obtain your credit services business bond, you have to complete our online application form (it takes 5min). When we receive all your paperwork, we will send you an exact quote. You can then purchase your bond straight away. We will deliver a paper and a digital version.
Keen on delving into the nitty-gritty details of the bonding process? Make sure to refer to our extensive How to Get Bonded page.
For further questions, don't hesitate to call us at (877) 514-5146.
What happens in case of a bond claim?
The goal of your credit services business bond is to protect your customers in the state. If you fail to follow the Tennessee Credit Services Businesses Act or other applicable rules, you can end up with a claim against the bond. This is the way in which harmed parties can demand fair reimbursement for the losses they have suffered.
The compensation can be up to the bond amount, which is $100,000 in this case. If the claim is proven, you are liable to pay the costs. Your surety may do so at first, but you need to repay it fully shortly after. Thus, the best course of action is to avoid situations that can lead to such complications.