Question about 75K Bond

Recently I made some research for my client who is opening a freight brokerage company. The biggest issue about opening his business was new requirement to have a 75K bond or trust.

I did some research about financial companies for bonds and trusts for brokers and found out, that Pacific Financial is one of the largest ones. I called them on behalf of my client and asked them some questions.


Here's the information they gave me:


- First of all they suggest to open a trust rather than a bond because having a trust gives you much more control over your money.

- They require no collateral. What matters, is credit scores of the person, responsible for the trust.

- They open a trust within one phone call, all they need are broker's MC# and some information about a person responsible for the trust. If MC is active and credit scores of the person are good, they will approve the trust and file all required information to FMSCA the same day.

- The most preferable option is to pay a relatively small administrative fee without a down payment quarterly or annually (paying for the whole year at once will save some cash). The first payment can be made over the phone with a credit/debit card right after the trust was approved. If you put some cash into the trust administrative fees decrease. (The table about amount of cash contribution and administrative fees is on their website). No needs to contribute any initial cash except the administrative fees, all additional cash contributions are voluntary.

- No other hidden or additional fees.

- After you have 75K in your trust no payment or fees are required.

- If a broker is out of business Pacific Financial will keep the money for 60 days (in case a claim is filed) and then give it all back to the broker.


Now here are my questions:


1. What's the catch? Is it really true what they told me? It all sounds very sweet and easy.

2. Is Pacific Financial a really good one? What do you think of it? Is it worth working with? If you don't think so, which company can you suggest for a bond/trust?

3. If an amount of a claim from a carrier is higher than amount of money in the trust, who is paying the rest? A brokerage company pays its own money or the trust pays for the claim and then administrative fees are increased?



Thank you very much!

 

Thank you for the link High Desert Dweller!
I called them and they said they are still a part of Pacific Financial and all information about process for $10K is true for $75K, they just didn't update their website.