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            <h1>Freight Broker Bond (BMC-84)</h1>
            <p>Obtain your broker authority.</p>
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            <h3>BMC-84 – What is a Freight Broker Bond?</h3>
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            <p>For aspiring and licensed freight brokers, BMC-84 is an important term to know and understand. A BMC-84 is a legal contract that provides protection to the shippers and motor carriers a freight broker works with over time. This protection means that issues with nonpayment or other questionable business practices may result in a claim against the freight broker bond which ultimately must be repaid by the broker.</p>
            <p>As part of the Federal Motor Carrier Safety Administration (FMCSA) rules, any registered freight broker that wants to maintain freight broker authority must have a bond or trust no less than $75,000 in place. It is helpful to know the difference between a freight broker bond and a trust, what cost brokers for a bond, and the process for obtaining a BMC-84 bond.</p>
			
			<h3>The Difference Between BMC-84 and BMC-85</h3>
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            <p>Two options exist for meeting the federal requirements of the FMCSA when it comes to protecting shippers and motor carriers in the freight business. The first is a BMC-84 which is a bond purchased from a surety agency, in an amount no less than $75,000. This freight broker bond operates like an insurance policy of sorts, but for your customers, not necessarily for liabilities your brokerage business may face. Should you fail to live up to your obligations as a broker, such as paying for services rendered, shippers and motor carriers can make a claim against your bond.</p>
            <p>You can think of the BMC-84 bond as a type of credit granted to you in exchange for paying a small percentage of the bond amount in place. Any legitimate bond claim is paid by the bond company to ensure your customers do not realize financial losses should something go wrong. However, you as the broker are required to repay that claim amount over time. Having claims against your bond can be a burden on your business, not only from a financial perspective but in terms of your business reputation as well. For these reasons, it is important to avoid bond claims when possible.</p>
            <p>As an alternative to BMC-84, a <a href="/bmc-85"><u>BMC-85 trust</u></a> may be established to meet the federal requirements for licensed freight brokers. A BMC-85 trust fund holds the full $75,000 required by FMCSA which you must place into the trust when it is created. Should an issue arise with a customer, the trust is used to pay claims. In many cases, having the $75,000 to place in the trust along with the costs associated with creating and maintaining it are too steep for a freight broker to manage effectively. This is why the BMC-84 bond is often the first choice among freight brokers.</p>
          
			<h3>The Cost of a BMC-84 Bond</h3>
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            <p>The price of a BMC-84 bond ranges from one freight broker to the next, but it is typically calculated as a percentage of the total bond amount put in place. That percentage ranges from 1 to 12%, so a total cost of $750 to $9,000 for a $75,000 freight broker bond. The percentage rate paid is determined by several factors, including your personal credit.</p>
            <p>Because a bond works as a form of credit extended to you, having a strong credit history is helpful in getting the lowest possible percentage rate for the price of the bond. The stronger your financial track record, the lower the percentage rate you pay for your broker bond.</p>
            <p>However, if credit has been an issue in the past, you can still get your BMC-84. The surety agency can also review other factors, such as business financials, experience in the industry, and assets and liabilities to determine the price you pay for your BMC-84 bond. Over time, as credit improves, the cost of your bond may go down, so long as claims stay minimal and you are working with the right surety company to get your BMC-84 bond.</p>
		  
			<h3>Getting a BMC-84 Bond</h3>
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			<p>As a freight broker, you have plenty of responsibilities to think about and manage each day. Getting your freight broker bond should be a priority, but it does not have to be a cumbersome process. You can apply for your BMC-84 bond through a brief online form after you have received your FMCSA registration and freight broker authority.</p>
			<p>One thing to remember is that you will want to ensure the surety company you work with has a strong financial backing and options for BMC-84 bonds, as well as the ability to file the bond with the FMCSA on your behalf.</p>
			<p>Once you have submitted your bond application, your surety agency will provide the pricing based on your credit and other financial factors. After the rate is paid and the bond details are filed with the FMCSA, you are in compliance with federal laws for bond requirements.</p>
		  
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