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Your surety bond rate is the percentage of the surety bond’s total amount that you have to pay in order to get bonded. When you apply for a bond, your surety assesses your business and financial strength, and determines your bond rate. Your bond rate determines what your surety bond will cost.

For every surety bond, the bond rate varies from one applicant to another. It is determined based on a variety of factors, including the applicant’s credit score, business experience, and financial statements.

Read on to learn what exactly affects your surety bond rate, and how rates differ from one bond to another.

What Determines Your Surety Bond Rate

Surety bonds function like an additional line of credit for your business. To get bonded, you do not need to pay the full bond amount. Instead, you are responsible for paying only the bond premium, also known as the surety bond rate, which is a percentage of the bond amount. The surety bond rate can be anywhere from 1% to 15% of the bond amount. This is the actual cost you need to pay for your surety bond.

These are the main factors determining your surety bond rate:

  • Your personal credit score and financial statements. The percentage, or bond premium, that your surety determines for you is based on your financial and business stability. As the surety bond resembles an additional line of credit for your business, the higher your credit score and the better your overall finances are, the lower the bond premium will be.
  • The type of surety bond you need. Some bonds involve less risk for the surety provider, which means lower bond amount and surety bond rate and less scrutiny during the application process. Others, such as contract bonds, pose a much higher risk, have higher bond amounts and thus higher rates, and involve a more extensive application assessment.
  • The ability of your surety to find the best surety bond rates. If your agency partners with multiple surety companies, it can shop around and offer you the most competitive surety bond rates on the market, depending on the type of bond you need, which state you’re in, and your financial stats. Bryant Surety Bonds fosters close relations with numerous A-rated, T-listed surety companies, which means we can get you bonded at the best rates.

Surety Bond Rates By Bond Type

Your surety bond rate will depend largely on the type of bond you need, your credit score, and your overall finances. Thus, if you need to post a $75,000 freight broker bond and your credit is 660, your rate will be different than if you need to post a $50,000 mortgage broker bond with the same credit.

In the table below are example surety bond rates for some of the most popular surety bond types. The bond rate is formulated as a percentage from the bond amount that you have to post.

Example Rates By Surety Bond Type

Credit Score/ Type of Bond Auto dealer bond Freight broker bond Mortgage broker bond Tax & utility bond Other license bonds (avg. rate)
700+ 0.75%-1.5% 1.25%-3% 0.5%-1.25% 1%-3% 0.75%-1.5%
650-699 1%-3% 3.5%-5% 0.75%-1.5% 2%-5% 1%-2.5%
600-649 2.5%-5% 7.5%-10% 2%-5% 15%-17% 2.5%-5%
550-599 5%-7.5% 10%-12% 5%-7.5% 15%-17% 5%-7.5%
549 and under 7.5%-10% 12%-13% 5%-10% 15%-17% 5%-10%

The average bond rate for most license bonds can be between 1% - 3% for the standard bonding market, and 5% - 15% for bad credit bonding.

Let’s take a closer look at the difference in surety bond rates between contract bonds and license and permit bonds:

  • License bond rates - license bonds, required when licensing your business, are considered less riskier and the bonding amounts are usually lower. In most cases, getting your surety bond rate for a license bond is quicker and easier, and the application process is shorter.

  • Contract bond rates - contract bonds, required for a specific contract, are seen as posing a much higher risk for sureties. The bonding amount is usually high, and the process of getting bonded is a bit more complicated compared to the license bonds.

Standard Market Surety Bond Rates

If your credit score is above 650 and your overall finances are in good shape, you’re likely to qualify for the standard bonding market. This means that in most cases, your surety bond rates will be in the range of 1%-3%.

For example, if you need to obtain a $20,000 surety bond and you qualify for the standard bonding market, you can expect your bond cost to be between $200 and $600.

Bad Credit Surety Bond Rates

The usual surety bond rates for bad credit bonding are between 5% and 15%. The higher percentage compensates for the higher risk involved. This means that for a $20,000 surety bond, your surety bond cost is likely to be between $1,000 and $3,000. Thus, even if your credit score is less than 650, or you have other negative financial records, you can still get bonded, although at a slightly higher rate.

If you need more information about the surety bond rates for bad credit applicants, check out our Bad Credit Surety Bond Program page.

Get an Exact Surety Bond Quote

To understand what your surety bond rate is and how much that would cost you, just fill out our online application form to get a free quote. It’s fast, it’s free and there are no obligations.

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If you have any questions about the cost of your surety bond, call us at 866.450.3412. Our experts will be happy to help you!

About us:
Bryant Surety Bonds, Inc. is a surety bond agency based in Pennsylvania. Licensed in all 50 states and with access to over 20 T-listed, A-Rated bonding companies, we have the contacts, expertise, and top service to provide you with a hassle-free experience, all while offering competitive rates for your surety bond.

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