Capital Requirement: Brokers must either deposit or finance $75,000 into a BMC-85 trust fund.

• PRO – The principal paid into a BMC-85 trust is returned to the broker when they cancel their fund or close their business.

• CON – You do not have access to this principal during the lifetime of the fund.

• If the trust is fully collateralized, Trust companies can charge an annual fee, sometimes up to $1,500, for managing the trust. ​TFS only charges a $650 annual fee to process your paperwork and for the management of the trust.

Financing your BMC-85: Transport Financial Services (TFS) requires a deposit (between $3k and $5k based on credit/history) and regular small monthly payments that comprise of principal and interest. (Monthly payments average at $300 per month – less if paid annually.  Interest rates are based on broker’s credit and history, deposit amount and if they pay monthly vs. annually).

Direct Claim Payments: Valid claims are paid directly from the trust fund without the intermediary investigation that a surety might conduct, potentially leading to quicker resolutions but less scrutiny.  TFS has a claims department that allows claimants to submit information online, here on our website, and then allows the broker to easily answer that claim.  It is then our team’s job to identify if the claim is reasonable and if the broker needs to supply any response.  Alot of times these claims are closed without any scrutiny and do not affect the brokers status with the FMCSA.

Upfront Costs: Instead of depositing the full $75,000, brokers can pay an annual premium, typically ranging from 1% ($750.00) to 12% ($9000.00) of the bond amount, based on creditworthiness and financial history. ​

• PRO – If a broker has great credit and history, they can pick up a BMC-84 surety bond for as little as $750 a year.
• CON – Any money paid into the surety bond is a cost of doing business and cannot be classified as an investment in the brokerage business.
• CON – If you have a bad credit or questionable business history the deposit will be high.

Preservation of Capital: This approach allows brokers to retain working capital for other business operations, as they are not required to tie up significant funds in a trust. ​

Surety’s Role in Claims: The surety company investigates claims thoroughly before any payouts, offering an additional layer of scrutiny and potentially protecting the broker from unwarranted claims.