In 2013, the Federal Motor Carrier Safety Administration began enforcing the $75,000 freight broker bond. This new bond rate sparked a lot of controversy and public outcry in the industry because annual freight broker bonds had been $10,000 for the previous 30 years. The bond renewal deadline for freight brokers is coming up very soon, so we thought it would be good to give freight brokers some pointers to make the bond renewal process easier.
The deadline differs depending on when you started your freight brokerage
If your freight brokerage was in business on or before 2013, then you must obtain and file with FMCSA a surety bond or trust fund agreement in the amount of $75,000 before or on October 1 each year. The FMCSA has determined that this date is when all of the bonds expire. Freight brokers do have a one- to two-month grace period to file their bond after the October 1 deadline.
If, however, your freight brokerage was started after October 1, 2013, the deadline for filing your freight broker bond will be exactly one year after the date that you listed your first bond. Freight brokers who are unsure of their bond listing date can check this on the FMCSA’s website.
What happens if you can’t comply with the bond renewal process?
Renewing your freight broker bond can put pressure on freight brokers, especially those who are waiting for their clients to pay them. If the funds to pay the premium on a $75k freight broker bond isn’t readily available, then it’s time to explore ways of getting cash quickly.
An increasingly popular cash flow solution for brokers is to factor your outstanding invoices. In this case, a factoring company will purchase your freight bills and advance you a large portion of the total invoice amount. Once your client has paid, they will give you the rest of what you are owed, minus a small factoring fee.
Interstate Capital is a freight bill factoring company that can quickly turn your outstanding invoices into cash so that you can renew your freight broker bond in October. Get an instant factoring rate quote today.