Overview of Tennessee Collection Service License Bond Requirements

You will need to post a collection agency bond when applying for a collection agency license in Tennessee. The amount of this bond can be $15,000, $20,000 or $25,000 depending on the number of employees your agency has.

The purpose of the bond is to guarantee that collection agencies will comply with the provisions of the Tennessee Code Annotated and the agreements made between the agency and their clients. If an agency violates these provisions, a claim can be filed against their bond by any party that has suffered a loss as a result.

Under a bond claim, the surety will extend compensation to claimants up to the full amount of the bond, also known as the penal sum of the bond.

For first-time bond applicants, see our ‘What is a surety bond’ guide for a detailed walkthrough!

Start your surety bond application today! Why us?
  • Quick turnaround - just 1-2 business days
  • Tailor-made advice on building a strong application
  • Exclusive bad credit programs

In the sections below you can find out more about the cost of getting bonded, how bond claims occur, and how to apply for your bond!

If you prefer to speak to someone personally about this bond and the requirements for agencies in Tennessee, call us at (866)-450-3412!

Cost of Getting Bonded

The cost of getting bonded is a fraction of the full amount of your bond. Your exact bond rate (or cost) is determined by the surety when you apply for a bond quote. In the process, the surety will consider your personal credit score primarily and, if necessary, other information such as your business and personal financial statements.

Typically, applicants with a credit score of 700 FICO or more, can expect a bond at a rate between .75% and 1.5% of the full amount of their bond.

Get a quick estimate of the cost of your bond through our bond calculator below. You can also check the table for a tentative bond rate based on your credit score. To request an exact quote on your bond, see the section about getting bonded below!

Bond Cost Based on Credit Score
Tennessee Collection Service License Bond Surety bond amount Above 700 Between 650-699 Between 600-649 Below 599
1-4 employees $15,000 $112.5-$225 $150-$375 $375-$750 $750-1,125
5-9 employees $20,000 $150-$300 $200-$500 $500-$1,000 $1,000-$1,500
10 or more employees $25,000 $187.5-$375 $250-$625 $625-$1,250 $1,250-$1,875

Bad Credit Bond Program

If you want to get bonded but have a low or no credit score at all, our Bad Credit Program is right for you!

This program allows all applicants who currently have lower credit scores, to apply for a bond and get bonded, even if at slightly higher rates. Rates under the program are higher due to the increased risk that sureties perceive in bonding such applicants. Bond rates are not fixed, and you can easily get a better rate next time by improving your credit score. The more you improve your credit score, the more you will see your bond rates improve as well!

For more information regarding the program, and to request a quote - see the program page!

Bond Claims

The bond for collection agencies in Tennessee is conditioned upon “the licensee faithfully and truly accounting to the licensee’s clients within thirty (30) days after the close of each calendar month, unless otherwise provided by mutual agreement between the collector and the client. As provided in Title 62, Chapter 20, Tennessee Code Annotated.”

If a collectors violates this condition of their bond agreement or the agreement they have with their clients regarding accounting for any collections, the latter can file a claim against the collector’s bond.

The surety must then investigate the claim and cover claimants for any losses they have suffered as a result of such a violation. Compensation extended to claimants can be as high as the full amount of the bond. In return, the bonded collector must then repay the surety in full for any compensation it extends.

This means that a bond claim can potentially lead to costs for collectors which can significantly disrupt their operations as well as cause reputational damage to their company. For that reason, strictly complying with the conditions of the bond and avoiding situations that could give rise to a claim is imperative!

Apply for Your TN Collection Service License Bond Today!

To get a free and exact quote on your bond complete our bond application form! We will shortly contact you with your quote along with more information about completing the bond application process.

Your bond will be issued within two days of receiving your completed bond application. We will send you the original by regular mail as well as a digital copy by email.

Start your surety bond application today! Why us?
  • The lowest possible rates
  • A 100% money-back guarantee
  • Access to specialty programs, not available to small agencies

Call us at (866)-450-3412 if you want to know more about the bonding requirements in Tennessee or if you have any other bond-related questions!


About the author:
Todd Bryant
Todd Bryant is a graduate of Germantown Academy and the University of Pittsburgh College of Business Administration Honors College. He has been President of Bryant Surety Bonds, Inc., an A+ rated Business with the Better Business Bureau, since 2007. Licensed as a producer with the Department of Insurance, he has been published in the National Association of Surety Bond Producers newsletter and on numerous authoritative publications such as The Washington Post, Entrepreneur.com, Azcentral.com and many more.