Also known as the Freight Broker Bond, and formerly known as the Interstate Commission Bond, or ICC bond, a BMC-84 bond is required by the Federal Motor Carrier Safety Administration (FMCSA) in order to legally operate as a transportation broker. The FMCSA Bond guarantees that the principal will properly deliver the brokered products and remit the necessary payment to the proper parties. The FMCSA also allows brokers to submit a BMC-85 trust fund in place of the BMC-84 bond. The BMC-85 should only be used if the freight broker can not obtain a BMC-84 bond. There are two main advantages of the freight broker bond when compares to the BMC-85 trust. First the bond typically allows you to keep more capital in your business as all that is required is a yearly premium as opposed to a $10,000 trust. Secondly, should a claim arise the surety will investigate to ensure the claims validity, with the BMC-85 often times the money is just withdrawn from the trust when the claim is filed. Due to a high amount of bond claims over the last several years, these bonds are considered high risk and most sureties require 100% collateral. Due to several well-established relationships in the surety industry, Novus Bonds can place these bonds with no collateral for most applicants. In order to receive the best quote possible, business financials for established businesses or a Resume/Business plan for new companies may be requested. The Freight Broker Bond is the only bond we offer that is not actually issued on a physical form. Instead we will notify the FMCSA electronically of the bond, and they will update their official web site with your bonded status. An MC number will be required at the time of issuing. For those with questionable credit, and do not qualify for the standard market, a high-risk surety bond market exists for freight brokers. This program charges higher rates than the standard market. Why is a Surety Bond better than the BMC-85? The BMC-84 (Freight Broker Surety Bond) is a surety bond, whereas the BMC-85 is a trust fund. While the FMCSA authorizes submittal of the BMC-85 trust fund in place of the BMC-84, it is recommended that brokers only file for the BMC-85 if they are unable to qualify for the surety bond. BMC-84 Surety Bond: This option requires an annual premium for the bond, and potentially could require collateral if you can't reach the proper markets. However, if a transportation broker can obtain the BMC-84 bond, they certainly should do so because it will free up a significant capital for them to run their business with. Additionally, it will guarantee that the surety company will process any possible claims on the bond. BMC-85 Trust Fund: With the BMC-85 option, transportation brokers must post the full amount directly to the government in the form of a trust fund, which ties up a fairly significant amount of capital that could otherwise be used to run the company. The way it is designed to work is that the government holds this money in an account, and in the event of a claim they'll pull those funds to pay it. The government entity will process any potential claims, and will likely not have the same incentive that a surety company would have in determining claim validity. The only positive for this option is that just about anyone can obtain it, no matter how poor their credit may be, however the negatives clearly tip the scale in favor of the BMC-84 surety bond option.