Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Nebraska collection agency license bond needs. Learn how to get a collection agency license in Nebraska, below.
What Collection Agency Licenses Are Issued in Nebraska?
Every individual or business entity engaged in third-party debt collection in Nebraska must obtain a Nebraska collection agency license from the Licensing Board, which is part of the Nebraska Secretary of State’s office.
What Are the Steps in the Licensing Process?
The application for a collection agency license is available on the Secretary of State website. You’ll need to provide supporting documentation such as financial statements, business formation documents, personal references, and a list of the agency’s employees (solicitors and collectors) to be licensed.
You’ll also need to purchase a Nebraska collection agency license bond in an amount that’s based on the number of solicitors and/or collectors working for the agency:
- Fewer than five requires an amount of $5,000
- Five to fifteen requires an amount of $10,000
- More than sixteen requires an amount of $15,000
The Board reviews collection agency license applications quarterly. You’ll need to submit your application package by the first day of January, April, July, or October for it to be processed during the upcoming review period. Don’t forget to submit payment of the licensing and background check fees (currently $200 each) along with your application.
Why is a Nebraska Collection Agency License Bond Required?
The bond is your guarantee to do business in accordance with the laws governing debt collection in the state of Nebraska. It holds the state harmless for damages caused by unlawful or unethical business practices that violate those laws. It also provides a source of funds that can be used to compensate consumers and creditors who have suffered financial harm as a result of such violations and have obtained a court judgment awarding them damages.
How Are Nebraska Collection Agency License Bond Claims Paid?
There are three parties to a legally binding surety bond agreement:
- The obligee requiring the bond is the Secretary of State.
- The principal purchasing the bond is the collection agency.
- The surety underwriting and authorizing the bond is the bonding company.
Only the principal is legally obligated to pay valid claims. However, unless the principal pays a claim promptly, the surety will expedite matters by paying the claim initially and then collecting reimbursement from the principal.
How Much Does a Nebraska Collection Agency License Bond Cost?
The annual premium for a Nebraska collection agency license bond is a small percentage of the required bond amount. That percentage (the premium rate) is determined largely by the principal’s personal credit score. A high credit score is a good indication that the surety will have no trouble getting reimbursed by the principal for claims paid on the principal’s behalf. With excellent credit, the premium rate can be as low as 1%.
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