Money Transmitter Bonds in Nevada Explained
Launching a Nevada money transmitter business entails that you meet a range of licensing requirements that guarantee your suitability for the job. It is necessary to provide a money transmitter bond to comply with them.
The goal of the bonding criterion is to ensure your legal compliance. It functions as a security mechanism in cases when a bonded party transgresses from the law.
The money transmitter bond that you have to get is similar to a three-party contract. Your money transmitting company is the principal, while the Nevada Department of Business and Industry is the obligee to whom you have to present the bond. The surety is the third party that gets you bonded.
Questions about Money Transmitter Bonds in Nevada
Who is required to obtain a money transmitter bond in Nevada?
You need to obtain a Nevada money transmitter license in order to launch your operations in the state. The licensing process is managed via the website of the Nationwide Multistate Licensing System and Registry (NMLS). However, the licensing authority is the state Department of Business and Industry. It imposes a minimum bonding requirement of $10,000. The maximum bond amount is $250,000 and depends on the number of your locations. The bonding guarantees you will comply with the Nevada Revised Statutes, Chapter 671.
How much does it cost to get a money transmitter bond in Nevada?
The bond minimum bond amount for Nevada money transmitters is $10,000 for your first location. Any additional location requires adding $5,000 to the bond amount. The maximum bond coverage can be $250,000.
Your actual surety bond cost is only a few percents of this amount. This is the bond premium, which usually is between 1% and 5% for applicants with sound finances.
In order to determine your bond price, the surety that you apply with has to consider a range of factors about your finances. It needs to examine your personal credit score, as well as your audited business financials in case you need a larger bond amount. Personal financial statement and cash verification may also be needed in the process. The more stable your overall profile is, the smaller your bond cost should get.
Can I obtain bonding with bad credit?
While it may be possible to get a Nevada money transmitter bond with problematic finances, the bonding decision will depend largely on the strength of your finances. The surety underwriter has to feel confident enough in your profile to be able to extend a large bond amount coverage to you. You will have to showcase your audited business financials and provide as much financial proof as possible.
How do I apply for a bond?
We have prepared a thorough guide about the bonding process. You can consult it on How to Get Bonded page.
Lance Surety Bonds specialists can help you with further queries or if you need help with your application. You can reach us at (877) 514-5146.
How are bond claims handled?
The purpose of bonding is to provide a safety mechanism for the state and its citizens in case you do not follow Nevada laws. A party that has suffered damages due to your illegal or fraudulent actions can seek reimbursement by making a claim against your surety bond.
The maximum sum that can be sought is the bond amount you have posted as part of the licensing. Your surety may cover the costs initially, but you are liable to repay it as per the bond indemnity agreement. This means bond claims can be a serious harm to your business and should be avoided as much as possible.