Running a business in the States requires a license and permit bond. Failing to avail yourself of it can land you in trouble. So, if you’re confused about whether your business needs a surety bond, you’re on the right track! 

Surety bonds are required in the health-care, manufacturing, and construction sectors. They assure that the business you’re doing complies with the law and is free from fraud.

If in any case, you go against the law, it can result in the license cancellation and fines imposed by the government.

To avoid such penalties, in this guide, you’ll learn in detail if you need a license and how to get it. 

What Are License and Permit Bonds?

A license or permit bond is like a promise you make to follow state laws and do your job right. It’s a type of surety bond, which is a contract between three parties:

• You (the Owner): The person or business that needs the bond.

• The State (the Obligee): The government agency that requires the bond.

• The Surety Company: The company that sells you the bond and backs it up.

In the event that you break the rules or injure one of your customers, the bond will pay to rectify the situation. This will safeguard your customers and ensure that you do not go against the law.

Why Do You Need These Bonds?

States require license and permit bonds to:

• Protect Customers: If you mess up, customers can get their money back.

• Follow Rules: Bonds, make sure you obey state laws.

• Keep Things Fair: They stop businesses from cheating or cutting corners.

• Protect Money: If you handle customer or public funds, bonds guard against misuse.

Every state has different rules, and the bond you need depends on your job or business. If you need any help regarding the license and permits, Surety Bonds is always here to help. They are best at what they do!

Bond Requirements by State in 2025

Bond rules differ from state to state and they may differ significantly. Some large states and typical occupations such as contractors, car dealers and mortgage brokers are given below. To receive the latest details, always contact the licensing office of your state.

1. California

California has strict rules because it has so many businesses.

• Contractors: To be a contractor, you require a bond of $25,000. This could increase in future, so consult the Contractors State License Board.

• Car Dealers: You must have a bond of $50,000 in the event you sell new or old cars.

• Mortgage Brokers: To work in real estate or finance, you should have a $50,000 bond.

• Other Bonds: Notaries must have a bond of $15,000, and freight brokers must have a $75,000 bond.

2. Texas

Texas focuses on protecting customers.

• Contractors: No bond is required in the state, but some cities such as Houston may request a bond in the range of 5000-25000.

• Car Dealers: You must have a bond of 25000 to sell cars.

• Mortgage Brokers: They have to submit a bond of $50,000, or larger companies may require more.

3. Florida

There is a lot of construction and tourism in Florida, which necessitates the use of bonds.

• Contractors: Your bond is $10,000 -25,000, depending on your job.

• Car Dealers: The car dealers must post a bond of $25,000.

• Mortgage Brokers: You are required to have a $25,000 bond, and other workers are required to have any additional bond.

4. New York

New York cares about protecting people in finance and services.

• Contractors: The state does not specify a bond condition, but the city such as New York City may request a bond worth five thousand dollars-to-twenty thousand dollars.

• Car Dealers: Used car dealers must have their bond amount to 50,000 dollars and new car dealers may require 100,000 dollars as bond amount.

• Mortgage Brokers: A bond of up to 50.000 dollars is demanded.

5. Other States

• Illinois: Certain jobs (such as plumbing) require contractors to put up bonds, typically of $10,000-$20,000. The bond required by car dealers is $50,000.

• Georgia: Used car lots require a bond of $25,000, and a contractor may require a bond to receive some permits.

• Nevada: Contractors must have bonds that range between $1,000 to $500,000 in regard to the work.

• Ohio: Car dealers require a $25,000 bond, and local bonds may be required by contractors.
  

You need to review your state guidelines, because even cities within the same state may vary. Always consult the state licensing office for the current information.

Types of License and Permit Bonds

There are many kinds of bonds, depending on your job. Here are some common ones:

• Contractor Bonds: Make sure contractors follow the rules and finish jobs.
• Car Dealer Bonds: Protect customers from dishonest car sales.
• Mortgage Broker Bonds: Keep clients safe from bad financial deals.
• Notary Bonds: Ensure notaries do their job honestly.
• Freight Broker Bonds: Guarantee freight brokers pay drivers and shippers.
• Money Transmitter Bonds: Protect people when you handle money transfers.

How Much Do Bonds Cost?

You don’t pay the full bond amount—just a small part called the premium. The cost usually depends on:

• Bond Amount: How much the state requires (like $25,000).
• Your Credit Score: Good credit means a lower cost (1-3%). Bad credit means a higher cost (5-10%).
• Your Job: Risky jobs like construction cost more.
• Surety Company: Different companies charge different rates. To save money, compare prices from a few surety companies and try to improve your credit score.

How to Obtain a License or Permit Bond

Getting a bond is easy if you follow these steps:

• Find Out What You Need: Check with your state or city to see what bond you need and how much it costs.
• Pick a Surety Company: Choose a trusted company that sells bonds. Many let you apply online.
• Fill out an Application: Give details about your business and yourself, including your credit score.
• Pay the Premium: After approval, pay the premium. You’ll need to renew it every year or as required.
• Send the Bond: Give the bond paperwork to the state or city to finish your license.

Conclusion

License and permit bonds play an important role in running a legal business in the U.S. They help you comply with the law, and by knowing what your state requires, you can avoid hefty fines. 

In 2025, as rules change, keep checking with your state and work with a good surety company. Whether you’re building houses in California, selling cars in Texas, or helping with mortgages in Florida, the right bond sets you up for success.