FRO Bonds in Florida

What is an FRO Bond?

The State of Florida $100,000 Financially Responsible Officer (FRO) bond guarantees the faithful performance of the officer in charge of the organization. If they fail in this capacity, the Surety is expected to step in and help correct the situation. It is a lot like having a co-signor on a loan.

Obviously “it depends” but if you have a good credit over 750, you are looking at $1,000. If your FICO credit score is below 600, they typically cost about $2000. We do have sureties that are willing to issue FRO bonds when you have REALLY poor credit. You may need to talk to us directly if you have credit issues.
If you are looking for a bond because you found out your FICO credit score is below 660, you may actually need a License Bond. Click here to learn about these bonds and how much they cost.

What information do you need to get us?

As of March 1st, 2015, we really only need you to fill out the online application.Should we be unable to obtain you a bond initially, the surety “may” request some of the following information from you:

DO NOT send these unless we ask you to!

Surety Specific FRO Bond Application: Each surety company will have their own commercial bond application and indemnification agreement to obtain the bond. While Surety A might accept Surety B’s application for the purpose of running the initial credit profile, Surety A will eventually require the principal to sign (and possibly notarize) Surety A’s own commercial application if the principal wants to obtain the bond. A bond application will also help the surety to determine: the bond amount, who is requiring the bond of the principal (obligee), principal’s contact information, owner(s) contact and personal information, etc. A surety can decline an applicant if they find that any of the information is inaccurate. At times, a surety will not want to write bonds when certain obligees are involved.

Business Financial Statements (Balance sheet, income statement, statement of cash flows and aging schedule for account receivables and account payables) are classified into 4 categories, in order of preference by the surety. Because FRO bonds are only $100,000 in penal sum, most sureties will accept any form of business financial statements for the commercial bond submission. Financial Statement Form 

– Audited Statements: An audit verifies relevant items in the financial statement with internal and external investigations of their accuracy. The accountant certifies that the financial statement is presented in accordance with generally accepted accounting principles.

– Reviewed Statements: A review statement, which does not require the outside verification present in an audit, consists principally of a thorough review of the contractor’s financial records and the application of certain analytical procedures to the financial data. Although narrower in scope than a full audit, the review does provide some limited assurance about the financial statements.

– Compilation Statements: A compilation statement provides little or no assurance of the credibility of the figures presented and would typically be accepted only for interim statements.

– In-house Statements: An in-house statement is internally prepares and very little weight or credibility at attached to the information on the statements.

Resume on the owner(s): Provides a clear and concise history of the people who either own or will be overseeing the business. This will let’s the surety know that the key owners/employees has the knowledge and experience to run the business and undertake that scope of work that is called upon by the bond.

Personal financial statements of the owner(s): Like the business financial statements, they can be audited, reviewed, compilation or in-house. Most sureties will accept in house statements as long as the key assets (cash, stocks, short term assets can be verified). Some commercial bonds, like the used car dealer bond, will require that the owner or principal of the bond have a minimum personal net worth to qualify for the bond. In instances, where the majority of the principal’s net worth is in easily to verify assets such cash and short term securities, it is also recommend that as part of the submission that verification of these assets are also submitted. You can use this form. if yo do not have one already.

Current Bank Statements: As previously discussed in item #4, some bond will require that the principal have a certain net worth and among the easiest way to verify the principal’s assets are to provide current bank statements and brokerage statements that can verify some of the assets that were declared in personal financial statement.

Letter of Recommendation: We have found most Sureties will require some sort of letter or email from your banker or vendor that basicly says you are a good client and that they recomend you as a risk.