What Is a Florida Money Services Business Bond?
Launching a Florida money services business entails obtaining a state license from the Florida Office of Financial Regulation. In order to receive your license, you have to post a money services business bond.
The state authorities require a surety bond in order to ensure your legal compliance. It is there to guarantee that will follow the law and thus not harm your customers. A claim can be brought against you in case you transgress from your obligations.
The money services business bond works like a contract between three entities. The principal is your company. The Office of Financial Regulation is the obligee that imposes the bond requirement. The bond provider is the surety.
Frequently Asked Questions
When do I need to obtain a bond?
If you want to operate a money services business in Florida, you have to obtain a state license. The Office of Financial Regulation requires you to post a surety bond between $50,000 and $2 million, depending on the amount of money you handle yearly. This applies for getting a Florida money transmitter license (sub-classification) as well. You have to use the official bond form. It ensures your compliance with the Florida Money Transmitter Law.
What is the Florida money services business bond price?
In order to get a Florida money services business license, you will need to provide a surety bond between $50,000 and $2 million. The exact amount is set as 2% of your yearly volume of handled money.
Whatever the required bond amount is, you only have to pay a percentage of it, which is your bond premium. It is only a fraction of the required amount, which which is often about 1% and 5% for applicants with solid finances.
The exact surety bond cost is determined on a number of factors. The most important ones include the financial strength of your business, which may entail a review of your audited business financials. The surety you apply with is also likely to consider the personal finances of the owner, as well as their personal credit score. For money services business bonds, the type of currency handled by the applicant also can influence the bond price. By assessing these diverse factors, the surety can measure the level of bonding risk and thus decide on the bond premium.
Can I get bonded with bad credit?
While more difficult, it may be possible to get a Florida money services business bond even with problematic finances. The prerequisites would be to showcase a stable business and personal financial statements. The bond underwriter will have to extend a surety credit of up to $2 million, so your audited business financials will be the most important factor for the bonding decision.
How do I apply for my bond?
Would you like to learn more about how bonding works? We’ve gathered the essentials in our How to Get Bonded page.
In case you need more information, you can call us at (877) 514-5146. Lance Surety Bonds’ specialists will help you out.
What happens in case of a surety bond claim?
Your money services business bond does not protect your company, but instead safeguards the interests of your customers. If you engage in fraud and misuse when conducting your money services, and a party suffers damages as a result, you can end up with a claim against your bond.
The maximum amount that claimants can seek as a compensation is the bond amount you have posted. When a claim is proven, your surety has to ensure the harmed party receives a fast reimbursement. Thus, it may pay the costs at first. However, as per the bond indemnity agreement, you are fully liable for all payments. This makes bond claims a financially burdening matter, so it’s best to avoid them as much as possible.