Financial Guarantee Bonds

What Are Financial Guarantee Bonds?

Financial guarantee bonds are a type of surety bond that guarantees payments owed to another party will be made — such as taxes, deposits and loans. Essentially, these bonds serve as a form of insurance that a business or professional will fulfill their financial commitments. If the principal (the bonded party) fails to make timely payments, the harmed party can file a claim on the bond for compensation. 

SuretyBonds.com is licensed to issue financial guarantee bonds in all 50 states. We provide the fastest and easiest bonding process.

Most Common Financial Guarantee Bonds

While financial guarantee bonds vary widely across many industries, the following types are the most commonly used and widely recognized:

Alcohol Tax Bonds: Ensure payment of federal or state alcohol taxes and compliance with regulations related to the production, distribution, or sale of alcoholic beverages.

Freight Broker Bonds: Guarantee that freight brokers will adhere to federal regulations and pay carriers for services rendered.

Lottery Bonds: Guarantee that lottery operators will comply with state regulations and ensure the proper distribution of lottery winnings and management of funds.

Mortgage Broker Bonds: Ensure that mortgage brokers comply with state regulations and handle mortgage loan funds with honesty and integrity.

Sales Tax Bonds: Guarantee that a business will remit collected sales taxes to the appropriate state or local tax authorities.

Travel Agency Bonds: Ensure that travel agencies will operate ethically and by state regulations, including the proper handling of client funds and refunds.

Union Wage and Welfare Bonds: Ensure that employers meet their obligations related to union wages and employee welfare benefits, including contributions to health and pension plans.

Utility Bonds: Guarantee that a business or individual will pay for utility services (such as water, electricity, or gas) and adhere to utility company regulations.

While these are the most popular, we offer many more financial guarantee bond types. If you don’t see what you need above, start here to find the bond you need. 

How Much Does a Financial Guarantee Bond Cost?

The cost of a surety bond is a small percentage of the total bond coverage that is determined by your financial profile and other risk factors. Financial guarantee bond rates typically range from 1–10%. Applicants with excellent credit often see rates between 1–3%.  

Can I Finance My Financial Guarantee Bond?

Yes, you can finance the cost of some financial guarantee bonds. We offer a premium financing program to lower the upfront cost. If you have a higher premium due to poor credit history or a high-risk industry, financing allows you to purchase your financial guarantee bond across several installments.

The Importance of Financial Guarantee Bonds

Financial guarantee bonds play a crucial role in various industries by providing security and building trust between parties. Here are some of the key benefits of financial guarantee bonds: 

• Protect Against Risk: Offer a safety net for financial transactions, ensuring that obligations are met even if the principal defaults.
• Enhance Credibility: Increase the confidence of stakeholders and clients by demonstrating financial responsibility and reliability.
• Simplify Transactions: Help secure contracts and loans by reducing risks associated with financial commitments.

How to Get a Financial Guarantee Bond

Securing a financial guarantee bond involves several key steps to ensure you meet your specific needs and comply with requirements. 

Step 1: Assess Your Needs

Identify the specific bond type and amount you need for your business or project requirements.

Step 2: Find a Surety Provider 

Search for a licensed surety provider for your location and industry. A surety agency, like SuretyBonds.com, can expedite the application process and help you get the best rate by shopping the market.

Step 3: Submit an Application

Provide any necessary documentation, including financial statements, credit reports, and project or loan details. The surety company will review your application based on this information.

Step 4: Pay the Premium 

Once your application is approved, pay the bond premium. If necessary, discuss financing options with your surety provider.

Step 5: Receive Your Bond

Finally, you'll receive your financial guarantee bond. You need to file it with the obligee to be officially bonded.

Ready to get started? Submit an online application today.