Freight Broker Bond (BMC-84) vs. BMC-85

What is the difference between a BMC-84 Freight Broker Bond, and the BMC-85 Trust Fund?

First, let’s get what makes them similar out of the way.  Both, the Freight Broker Bond and the Trust Fund, are instruments to fulfill the $75,000 FMCSA requirement that went into effect 10/1/13, but they go about doing this in very different ways.

The application comes in the Portable Document Format (PDF). Please open the file and completely fill in your information. When completed, print the application and fax to the number provided on the top of the application. If you do not already have a .pdf reader you can download the Adobe Reader here

Freight Broker Bond (BMC-84)

The BMC-84 is secured by a surety bond. Surety Bonds are regulated by the insurance industry and can be viewed almost as a form of credit. In this particular case, the bonding company files a $75,000 policy in your name to the FMCSA so that in the event of a claim you’re covered. Bonds are obtained through an annual premium payment that is calculated as a small percentage of the $75,000 bond amount. They are also fully backed by an A-rated, T-listed bonding company who will investigate any claim that should arise before paying out on your behalf. Bond highlights Include:

  • No Cash Collateral, Line of Credit, Irrevocable Letter of Credit or Real Estate required
  • Free up working capital for your business
  • Full backing of an A-Rated, T-Listed bonding Company
  • No admin fees, just an annual premium
  • Simple One Page Application

Trust Fund (BMC-85)

The BMC-85 on the other hand, is a financial instrument that requires a $75,000 trust to be created in your name. This Trust is secured by cash, or some combination of Cash and an Irrevocable Letter of Credit. In this instance, you (the freight broker or freight forwarder) would give $75,000 cash to a trust company in order to secure the trust. In most cases a yearly administration fee will be charged. Should you no longer need this policy, the trust company may retain your money for a years’ time or longer. In addition, some trust companies are offering a hybrid solution where they will take as little as $10,000 cash and secure the rest of your requirement through a $65,000 Irrevocable Letter of Credit, or Line of Credit. This set up also has additional costs/fees. Again, the BMC-85 is summed up by:

  • Secured by your cash, or your credit
  • Yearly administration fees
  • Can hold your cash for several months or a year after you cancel you policy
  • Can negatively affect your credit by tying up your capital or securing lines of credit

Bryant Surety Bonds has been offering the BMC-84 for years, through its original $10,000 requirement to it’s new $75,000 level. Learn more about our BMC-84 Program here.

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