What Is a Grain Dealer Bond?
In a number of states, businesses who want to trade with grain need to get licensed with local authorities. A grain dealer bond is often a requirement for obtaining the proper license.
This type of license bond ensures your grain dealing business will comply with applicable laws. It protects grain producers you work with, as well as their agents or representatives. The grain dealer bond guarantees you will account for all of your sales and will make due payments to producers. If you break the rules, you can face a claim on your bond to provide compensation to affected parties.
Grain dealer bonds work like other surety bonds. They represent a contractual agreement between three parties. Your grain dealing business is the principal, the state authority that requires the bonding is the obligee, and the third party that provides the bonding is the surety.
Questions about Grain Commodity Bonds
Who needs to get a grain dealer bond?
If you want to operate as a dealer of grain, you may need to post a grain dealer bond to get your state license. The states that require this bond include Georgia, Missouri, North Carolina, South Dakota, and Washington. Before you start your licensing, check with your state authorities whether your business will need to post a bond.
Missouri grain dealer bond
Missouri grain dealers have to present a bond to the state Department of Agriculture. They decide the bond amount on the basis of the applicant’s financial statements. Here’s the official bond form.
North Carolina grain dealer bond
Grain dealers in North Carolina have to get a $100,000 bond. It’s required by the Department of Agriculture and Consumer Services.
Georgia grain dealer bond
In Georgia, grain dealers need to post a bond between $20,000 and $150,000. The amount is set by the state Department of Agriculture.
Washington grain dealer bond
Washington grain dealers have to post a bond to the state Department of Agriculture. The bond amount varies, and they have to use the official bond form.
South Dakota grain dealer bond
Grain dealers in South Dakota have to post a bond to the Public Utilities Commission. The bond form is available online.
Kentucky grain warehouse and grain dealer bond
Grain dealers in Kentucky need a bond between $25,000 and $1 million (official bond form). The Kentucky Department of Agriculture sets the bond amount.
How much does a grain dealer bond cost?
The surety bond price that you have to pay depends on the bond amount set for you. The exact requirement for your case is determined by the authorities that regulate grain dealer businesses in your state. The table below provides an overview on the amounts and costs.
To get bonded, you need to pay a bond premium, which is a small percentage of the bond amount. If your finances are in good shape, the rates are between 1% and 5%. If you have to post a $25,000 bond, this means you may need to pay about $250-$1,250 for your bond.
Your bond cost depends on your personal and business finances. Your surety has to examine your personal credit score, business financials, and your liquidity and assets. That’s how it will assess the level of risk associated with bonding you. If you have solid finances, you can expect a lower bond price.
Have more questions about your bond price? Make sure to consult our surety bond cost page.
|State||Surety Bond Amount||Credit Sore|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Georgia||$20,000 to $150,000||$150-$300 to $1,125-$2,250||$200-$500 to $1,500-$3,750||$500-$1,000 to $3,750-$7,500||$1,000-$2,000 to $7,500-$15,00|
|Kentucky||$25,000 to $1,000,000||$187-$375 to $7,500-$15,000||$250-$625 to $10,000 to $25,000||$625-$1,250 to $25,000 to $50,000||$2,500-$5,000|
Can I get a grain dealer bond with bad credit?
Lance Surety Bonds operates its Bad Credit Surety Bonds program to help businesses with low credit scores, tax liens, bankruptcies, or civil judgements get bonded.
The typical bad credit bonding premiums are between 5% and 10%. The higher price is needed to compensate for the increased risk. Since we have close partnerships with numerous A-rated, T-listed surety companies, you can be sure you’re getting a top bonding rate with us.
How Do I Get Bonded?
Ready to start your bonding? You can apply online today for a free, no-obligations grain dealer bond quote. If you want to learn your exact bond price, complete a full application and send your paperwork. We’ll deliver your quote right away.
Our How to Get Bonded page can provide you with further information if you have more questions.
For more details, just call us at (877) 514-5146. Our bonding experts will be happy to help you.
Still Have Questions? Check Our FAQ Pages
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