Brewers Bond

What are Broker Bonds?

A brewers surety bond is a type of liquor license bond that can be required by both the federal government and your state.

The Alcohol and Tobacco Tax and Trade Bureau (TTB) requires the bond in order to approve your Brewer’s Notice. Thus, the bond is also known as a TTB Bond. It used to be called ATF bond when the licensing authority was the Bureau of Alcohol, Tobacco and Firearms (ATF).

Your state and local authorities will also ask for a brewers bond to guarantee that your brewery will pay all government and state taxes. The requirements will vary depending on your specific location.

How exactly does the brewers bond function? This type of surety bond a contract between three parties: your brewery, as the principal, the federal or state authority, as the obligee, and the bond underwriter, as the surety. The surety guarantees the obligee that you will not transgress the rules of the bond.

If you commit tax fraud, or a similar failure on your bond conditions, a claim can be made on your brewers bond. Initially, the surety will cover whatever costs are owed to the obligee, up to the penal sum of the bond. Soon after, however, you’ll be required to reimburse all the costs. This is why it’s a good policy to keep your records clean, since a claim can have a very negative impact on your brewery.

How Much Does a Brewers Bond Cost?

The cost of the brewers bond required by your state or local authority will vary depending on your location. As for the bond required on the federal level (TTB bond), the bond amount is set at $1,000 for breweries that have excise tax liability below $50,000 for the current and previous year. Larger businesses should consult the TTB for the bond costs in their respective cases.

As you might already know, whatever the bond amount is, you need to pay only a percentage of it. If your brewers bond amount is $1,000, your surety bond premium will be somewhere between $100 and $250.

Saving on the Brewers Bond

Nobody likes paying too much for a bond, and there are ways to reduce the cost of your brewers bond. Here are three proven methods to do that:

• Improve your overall financial status and credit score
• Showcase your business’s assets and liquidity
• Select your surety provider carefully

One of the most important criteria considered by sureties when you apply for a bond is your personal credit score. The better it is, the less you will pay. Improving that stat will almost always reduce your bond cost. It’s also important to prove that the overall financial and business status of your brewery is solid.

Don’t forget that choosing the right surety underwriter also affects the bond price. With Lance Surety Bond Associates, you are guaranteed the lowest rates, as we foster strong relationships with multiple underwriters. We also offer specialty programs and are able to offer you a solution tailored to your needs.

Getting Bonded with Bad Credit

Many small brewers with bad credit history have a hard time launching their business. Whether it’s bad credit, past bankruptcies, liens or civil judgments, there is a solution.

Here at Lance, we are experts at bad credit bonding. Even if your financial situation is not perfect, we can get you bonded, so that you can start your brewery business and improve it over time. Usually, you will have to pay a higher premium, between 5%-15%, which mitigates the risk involved in such bonding. As with all our clients, we will shop around and offer you exclusive bonding rates, so that you can get your bond with no hassle.

Start Your Bonding Process Today

Launching your bonding application has never been easier. You can apply online today and get your free quote within minutes!

If you require more information about obtaining your brewers bond, you can always call our bonding experts at 877-514-5146.