What Is an Arkansas Money Transmitter Bond?
As in most states across the U.S., money transmitters in Arkansas need a state license prior to conducting operations. You need to obtain a money transmitter bond as a part of the licensing process.
The surety bond works as an extra layer of protection for the state and for your customers. It ensures that you will abide by all applicable laws.
Your Arkansas money transmitter bond is, in essence, a three-party contract. Your business is the principal. The Arkansas Securities Department is the obligee that imposes the bond requirement. The third party is the surety that backs your company by providing the bond.
Questions about Money Transmitter Bonds in Arkansas
When is this bond required?
All entities that want to operate as money transmitters in Arkansas need to get a license from the state Securities Department.
You have to provide a surety bond in a minimum amount of $50,000 to a maximum of $300,000. It should be filed in the official bond form. Your bond ensures your compliance with the Arizona Uniform Money Services Act.
What’s the Arkansas money transmitter bond cost?
The bond amount that you have to post as an Arkansas money transmitter is between $50,000 and $300,000. The minimum amount is $50,000, but you have to post $10,000 for each additional location. The bond premium that you have to pay, though, is only a small percentage of this amount. It is typically about 1%-5% for applicants with stable finances.
How exactly is your surety bond cost formulated? When you apply with a surety, it needs to take a close look at your personal and business finances.
First and foremost, it considers your personal credit score, followed by your company financials and assets and liquidity you may have.
If the bond amount is larger, a review of your audited business finances may be needed. On the basis of these factors, the surety assesses the level of bonding risk that you present. The smaller it is, the less you’re likely to pay for your bond.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Arkansas money transmitter bond||$50,000 to $300,000||$375-$750 to $2,250-$4,500||$500-$1,250 to $3,000-$7,500||$1,250-$2,500 to $7,500-$15,000||$2,500-$5,000 to $15,000-$30,000|
What if my credit is problematic?
With Lance Surety Bonds you may be able to get the bond you need even if your finances are not perfect. If you are struggling with a low credit score, tax liens, bankruptcies, or civil judgements, our Bad Credit Surety Bonds program may be just for you.
For money transmitter bonds in larger amounts, strong finances are still an important factor, so the approval will depend on the particular case.
The bad credit bond rates are around 5% to 10% since the bonding risk is higher. Due to our close collaboration with numerous A-rated, T-listed surety companies, we are still able to find a top bonding option for your particular circumstances.
How do I obtain my bond?
Would you like to learn more details about the way bonding works? You can consult our extensive guide on the How to Get Bonded page.
Lance Surety Bonds’ experts are here to help. Just reach us at (877) 514-5146 for any questions you may have.
How are bond claims handled for money transmitters?
The goal of your Arkansas money transmitter bond is to protect your customers and the state against potential illegal activities you may engage in. Thus, a surety bond claim can be brought against you if a party suffers damages as a result of your actions.
The claimants can demand a compensation of up to the penal sum of your bond. In the case of Arkansas, this can be between $50,000 and $300,000, depending on the amount that you posted. It is your responsibility to cover the costs, even though the surety may pay them at first.
This makes bond claims a serious financial threat that you should avoid. They can hurt your business financially and in terms of reputation.