You may find that qualifying for a surety bond is similar to qualifying for a loan. You may be asking, “How is a surety bond like a loan?” When qualifying for a surety bond, for many, the surety will run your credit report to find a financial responsibility score. Some look at the credit score while other sureties may use information found in the credit report to help decide if you qualify for a bond and not rely simply on the credit score. When a surety company issues a bond, they are extending credit to a principal.
How is a surety similar to a bank?
How is a surety similar to a bank? If a qualifying for a surety bond is like qualifying for a loan, you may wonder, how is a surety similar to a bank? Here are a few ways they compare:
- A surety charges a premium for a bond and expects to be paid back from a principal (the party required to get the bond in order to qualify for a contract, license or permit) in the event of a loss, much like a bank expects borrowers to repay loans.
- A surety, like a bank does not expect to suffer a loss and has a right to pursue a principal that defaults on their responsibility causing the surety to pay out.
- A surety give the principal something very important. They give the principal the benefit of their credit standing in order to qualify for a permit, license or contract, even the opportunity to bid for a contract. In return, like a bank giving a borrower the benefit of the bank’s money, in the case of a default, the surety has the right to recover their funds.
Surety Bond and Insurance
Seaman’s Insurance Group is your premier boutique independent surety bond and insurance agency. Proudly headquartered in the oldest city in the nation, St. Augustine, Florida. We are able to help with all of your surety bond needs in Florida, Maryland, Delaware, Georgia, Texas, New Jersey and more! We are positioned to help you with all of your surety bond needs in the USA. We have the distinct capability of helping you with your International Bid Bonds, International Performance Bonds and International Bid Bonds. Whether you are shipping goods from a port in South America to a Port halfway around the world
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