Collection Agency Bond Information
Collection Agencies are companies that pursue payment on debts owed by both businesses and individuals. Many states require that collection agencies acquire a surety bond.
What is a Collection Agency Bond?
State governments require all collection agencies to be bonded. Our agency offers a variety of programs designed to help all types of new and established debt collection agencies get approved and licensed quickly, and at excellent rates, in all 50 states.
- 100% Secure Online Application
- Lowest Rates
- Approval Rate Nearly 100% (even for the less than perfect credit applicants)
First, you’ll want to contact the specific state department that oversees collection agencies about your desire to conduct a collection agency business in that state and obtain a new license. Some state’s offer license checklists online, which can be very helpful. In addition to submitting an application to become registered or licensed, most states require surety bonds be posted to guarantee compliance with their collection regulations. Getting bonded with All Commercial Surety is simple. Once your new surety bond has been issued, you’ll submit a signed copy of the original bond to the state to be filed with your license. Frequently asked questions about the Collection Agency Surety Bond:
How Can Collection Agency Bonds Regulate the Industry?
These collection agency surety bonds guarantee proper accounting for funds received, ensuring that money collected by a collection agency will be properly dispersed to clients. Specific information of what each collection agency surety bond will guarantee may vary depending on individual state’s rules and regulations.
How Much Will a Collection Agency Bond Cost?
Annual premium amounts are determined based on owner personal credit. Owners with stellar credit may be eligible for standard surety insurance market rates, which range from 1% to 3% of the bond amount. If the owner has a low credit score, or past due items on their credit report, annual premium for surety insurance typically ranges between 5% to 15% of the bond amount. For most states, our high risk rate for surety insurance does not exceed 7.5%.
Information On State Specific Costs
Many of the 50 states require that collection agencies to get bonded. Some states do not require collection agencies to get bonded, though. The following of the 50 states have a bond requirement for collection agency:
- Alaska - $5,000 bond for collection agency
- Arizona - $10,000 - $35,000 bond for collection agency (based on gross annual income)
- Arkansas - $10,000 - $25,000 bond for collection agency (based on number of solicitors)
- Colorado - $12,000 - $20,000 bond for collection agency(based on gross annual income)
- Connecticut - $25,000 bond for collection agency
- Florida - $50,000 bond for collection agency
- Hawaii - $25,000 bond for collection agency
- Idaho - $1,500 bond for collection agency
- Illinois - $25,000 bond for collection agency
- Indiana - $5,000 bond for collection agency
- Maine - $20,000 bond for collection agency
- Maryland - $5,000 bond for collection agency
- Massachusetts - $25,000 bond for collection agency
- Michigan - $5,000 bond for collection agency
- Minnesota - $50,000 bond for collection agency
- Nebraska - $5,000 - $15,000 bond for collection agency
- Nevada - $35,000 - $60,000 bond for collection agency(based on number of solicitors)
- New Jersey - $5,000 bond for collection agency
- New Mexico - $5,000 bond for collection agency
- New York City of Buffalo - $5,000 bond for collection agency
- North Carolina - $20,000 bond for collection agency
- Oregon - $10,000 bond for collection agency
- Tennessee - $15,000 - $25,000 bond for collection agency(based on number of solicitors)
- Texas - $10,000 bond collection agency
- Utah - $10,000 bond for collection agency
- Washington - $5,000 bond collection agency
- West Virginia - $5,000 bond collection agency
- Wisconsin - $25,000 - $35,000 for collection agency (based on whether records are held entirely within state)
- Wyoming - $10,000 bond for collection agency
How Do I Get a Collection Agency Bond?
The first step is to apply for a free quote. Applying for a free quote is simple and once you’ve been approved, your agent will provide you with the bond premium due, along with an agreement with the surety. Once you’ve paid for your surety bond, and provided a signed copy of the indemnity agreement, your Collection Agency Bonds will be mailed out to you.
Can I Get Approved for a Debt Collector Bond if I Have Bad Credit?
Yes. While many sureties only offer quotes to customers with stellar credit, we have a variety of collection agency bonds programs that allows us to approve over 99% of applicants through our online application. Your annual premium will depend on your individual credit profile information, but we’re able to offer very aggressive rates.
Will my Collection Agency Bond work for multiple states?
No. You'll need to post a separate bond for each state that you will be conducting business in. Each state has their own bond requirements, and therefore you'll need to make sure to comply with each state's respective bond regulations.