Surety Bond Premium Financing
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Premium financing allows bond purchasers to take out loans to cover the costs of surety bonds. It involves an agreement between the bond purchaser, the insurance company issuing the bond, and a finance company providing the loan. The finance company typically requires a 25% down payment plus the first two months of payments up front, then finances the remaining balance at 10-15% APR to be paid back over the term of the bond, usually about a year. Premium financing is only available for cancelable bonds that do not pose a risk of default.
Surety Bond Premium Financing
- 1. > > What is Premium Financing?
- 2. Premium Financing is . . .A financing option for bond purchasers to cover the cost of a surety bond.Premium Financing is a Loan.
- 3. Premium Financing is . . . An Agreement between 3 Parties. - Bond Purchaser (You) - Insurance Company (Writing Bond) - Finance Company (Doing Loan)
- 4. Financing Surety Bonds is UniqueOnly available for Cancelable Bonds.Does your bond qualify? - Varies greatly. Check bond form. - Ask your agent or Inquire Here.
- 5. Financing Surety Bonds is UniqueFinancing co. will require 25% down.First 2 months payments up front.The rest is financed at 10-15% APR over the term of the bond (~1 year).
- 6. Lets Do an Example
- 7. Lets Do an Example
- 8. Lets Do an ExampleWhat you pay:$2,500 + Months 1 and 2 paymentsYou will make recurring monthly payments on the remaining balance for the term of the bond.
- 10. Why Premium Financing?Because financing is issued only on Cancelable Bonds, there is no risk of default.
- 11. Our TakeawaysPremium Financing is a Loan.Only done on Cancelable Bonds.25% Down + First 2 Months
- 12. Produced by the SuretyBonds.com Education Centerwww.suretybonds.com/eduwww.suretybonds.com/blog