How much does a livestock dealer bond cost?
The cost of your livestock dealer bond will depend on the amount of the bond you are asked to obtain.
When you apply at the U.S. Department of Agriculture’s Grain Inspection, Packers & Stockyards Administration (USDA GIPSA) for your livestock dealer registration, you’ll be informed of the bonding amount. Alternatively, if your state has particular bonding requirements for livestock dealers, the amount of your bond may be determined on a state level.
How much exactly you will need to pay for your bond is determined by the surety company that issues the bond. In setting a rate on your bond, the company considers your personal credit score and other financials as indicators for your bond cost.
Typically, applicants with high credit scores, those over 700 FICO, may be required to pay as little as 1% to 3% of the total bond amount in order to get their livestock dealer bond.
Options for applicants with bad credit
Even if you have trouble with your finances and your credit score is low, you can still get bonded.
Our Bad Credit Program allows bad credit applicants to obtain the bonds they need and keep doing business. The only difference between those bonds and regular bonds are the slightly higher rates that bad credit applicants need to pay. Higher rates under this program are due to the increased risk assumed by the surety when they bond applicants with low scores.
Visit the Bad Credit Program page to request an exact quote on your bond, and to speak to our experts about the solutions they can offer you.
What is the purpose of the livestock dealer bond?
The livestock dealer bond is commonly required not only from livestock dealers, but also packing companies, auction markets, stockyards, agencies buying on commission, and others.
The bond’s purpose is to guarantee that the bonded dealer will conduct business with the producers of livestock in a fair and honest way, and comply with state laws and regulations. In other words, the bond’s purpose is to provide protection to producers, if a dealer violates the conditions of the bond agreement or the federal and local regulations that apply to livestock dealers.
If a dealer violates the bond’s conditions and thus causes a producer to suffer losses or damages, a claim can be filed against the dealer’s bond. This triggers a claim investigation and may result in the surety paying a compensation to the livestock producer.
If a claim is made and compensation is paid by the surety, the bonded dealer must repay the surety for the full amount it has paid to claimants.
How to get a livestock dealer license
To get a livestock dealer license you will first need to apply at the USDA GIPSA. Once you complete the paperwork and obtain your bond there, you may also be required to apply at your local licensing body, and comply with local livestock dealer licensing requirements. This may include:
- Completing and filing a livestock dealer license application form (you will need to specify the license you wish to obtain, depending on the types of livestock you intend to sell)
- Providing business and personal information
- Obtaining a Federal Tax ID
- Payment of licensing fees
- Providing information regarding all vehicles used to transport livestock
- Obtaining a livestock dealer bond
For detailed instructions regarding your livestock dealer license, make sure to contact the USDA GIPSA and your local livestock dealer licensing body.
For questions regarding the bonding requirements for livestock dealers, or your personal livestock dealer bond, give us a call at (866)-450-3412. Our surety experts will be happy to provide you with additional information and assistance.