Consumer Finance Loan Company Bond

A consumer finance loan company bond is one of the best options for those looking to get a consumer finance company license in Florida. 

In 2022, the Consumer Finance Act (Chapter 516, Florida Statutes) was amended with SB 546. This amendment allows license applicants to “provide certain documents in lieu of evidence of liquid assets.” These documents include a certificate of deposit, irrevocable letter of credit, or a consumer finance surety bond. 

Consumer finance loan company bonds are a licensing requirement that protects the public (borrowers). It ensures they will be compensated for damages if a consumer lender fails to comply with licensing laws.

This includes “fraud, misrepresentation, or deceit, including willful imposition of illegal or excessive charges; or misrepresentation, circumvention, or concealment of any matter required to be stated or furnished to a borrower.”

Examples: 

• Unreasonable collection practices
• Illegal or excessive charges
• Charging excessive principal amounts for refinancing
• Deceptive advertising, such as using the logo of any bank or subsidiaries
• Unlawful credit card distribution
• Failure to furnish borrower with an annual report

Benefits of a Consumer Finance Loan Bond

The Florida Division of Consumer Finance is the licensor and regulator for consumer finance businesses and professionals. 

While they list documents that can be used instead of liquid assets—a certificate of deposit or irrevocable letter of credit from a financial institution—a consumer finance loan bond is the most advantageous for multiple reasons.

Non-Asset Collateral - Surety bonds can help you avoid asset-seizing situations. With a surety bond, you don’t have to put your assets on the line to secure your licensing. 

Increased Capital - Posting your own assets, including cash, in lieu of purchasing a bond decreases your liquidity. This can make it more difficult to get financing or cover major expenses in the future.

Claim Advocates - A surety company starts an investigation process if someone files a claim against a bond. The claim advocates assigned to your case—something that most other options don’t include—will ensure a claim is valid, so you don’t pay for false accusations. 

Consumer lenders in Florida need a consumer loan business bond to legally operate. It is for any persons or consumer finance companies soliciting, making, or collecting consumer loans for an amount not exceeding $25,000 at an interest rate greater than 18%. This may include loan originators and those who handle mortgage loans and payday loans.

Note that this type of Florida surety bond is not for certain financial institutions operating under state or federal laws. This includes banks, savings banks, trust companies, building and loan associations, credit unions, or industrial loan and investment companies. Additionally, it does not apply to title loans or mortgage brokers.

Penalties: 

Without a bond or the equivalent documents, a consumer finance loan license application may be denied and/or penalties may be incurred. “Failure to maintain liquid assets of at least $25,000 or a surety bond, certificate of deposit, or letter of credit in the amount required by s. 516.05(10) at all times for the operation of business at a licensed location or proposed location.” 

• A consumer finance loan bond must be issued by a surety or insurance company authorized to do business in Florida, such as JW Surety Bonds. 
• A company with at least one currently licensed location must provide a surety bond for at least $5,000 for each additional license.
• This bond must remain in place for 2 years after the licensee ceases licensed operations in Florida. 

Florida Consumer Bond Loan Cost: $250+ 

A Florida consumer loan bond must be in the amount of $25,000. However, the cost is only a fraction of this amount—on average 1% - 5% for those with good credit. The percentage you secure for your bond will depend on factors like your credit score, financial statements, and past history with bonds. 

Fill out a bond form to get an instant estimate. 

Have bad credit? Getting bonded is still possible. See our guide: How to Get a Bad Credit Surety Bond

Step 1: Find a Reputable Surety Company

Choosing the right surety company can ensure you get the right bond. Plus, if a bond claim ever arises, you have the support you need. 

Step 2: Fill Out an Online Bond Application

Apply for a Consumer Finance Loan Company Bond in the amount of $25,000. The easiest way is to apply online for a free bond quote. It takes minutes and you can get bonded within a day or so in most cases.

Our quotes are no obligation, take 5 minutes, and you will be able to lock your rate for the next 90 days (in case you want to purchase the bond).

Step 3: Sign the Agreement & Pay

Sign the agreement, email or fax it back to your bond provider, and pay your invoice online. Once everything is processed, you will receive an email copy of the surety bond. Additionally, the original bond will be sent to you in the mail. 

Additional Requirements for a Florida Consumer Finance Company License

In addition to a surety bond, a new application for a consumer finance company license requires:

• Business Name – Legal business name as filed in the state of formation. 
• FEID# – Provide Federal Employer Identification Number as assigned by the IRS. 
• Addresses – Physical address of applicant or licensee, address where records are stored, and mailing address. 
• Contact Information – Name and phone numbers.
• Business Structure – Information about your organization, members, and history of operations.
• Criminal Disclosure – Questionnaire and certified copies of criminal convictions or administrative orders entered against the applicant. 
• Net Worth Requirement – Employment, residential, and licensing history.
• License Fees – Required fees must be submitted with your completed application form.