Missouri Small Loan Company Bond: A Comprehensive Guide

July 2, 2021

Missouri Small Loan Company Bond

This guide provides information for insurance agents to help their customers obtain Missouri Small Loan Company Bonds

At a Glance:

  • Average Cost: Between $1,000 to $7,500 per year based on the applicant’s credit
  • Bond Amount: $100,000
  • Who Needs it: All small loan companies operating in Missouri and who do not submit audited financial statements, prepared by a CPA, with their license renewal application
  • Purpose: To ensure the public will receive compensation for any damages should the small loan company fail to comply with licensing law
  • Who Regulates Small Loan Companies in Missouri: The Missouri Division of Finance

Background

Missouri statute 367.110 requires all small loan companies operating in the state to obtain a license with the Division of Finance. The Missouri legislature enacted the licensing laws and regulations to ensure that small loan companies engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, small loan companies who do not submit audited company financial statements with their license renewal application must purchase and maintain a $100,000 surety bond.

What is the Purpose of the Missouri Small Loan Company Bond?

Missouri requires small loan companies who do not submit audited financial statements with their license renewal application to purchase a surety bond as part of the application process to renew their business license. The bond ensures that the public will receive compensation for financial harm if the loan company fails to comply with the regulations set forth in Missouri statute 367.215. Specifically, the bond protects the public in the event the small loan company engages in any acts of fraud or fails to honor the terms of any loan agreements. In short, the bond is a type of insurance that protects the public if the small loan company breaks licensing laws.

Missouri Small Loan Company Bond Form

Missouri Small Loan Company Bond Form

How Can an Insurance Agent Obtain a Missouri Small Loan Company Surety Bond?

BondExchange makes obtaining a Missouri Small Loan Company Bond easy. Simply login to your account and use our keyword search to find the “consumer” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Is a Credit Check Required for the Missouri Small Loan Company Bond?

Surety companies will run a credit check on the owners of the loan company to determine eligibility and pricing for the Missouri Small Loan Company bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Missouri Small Loan Company Bond Cost?

The Missouri Small Loan Company bond can cost anywhere between $1,000 to $7,500 per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $100,000 bond requirement.

$100,000 Small Loan Company Bond Cost

Credit Score Bond Cost (1 year)
800+ $1,000
625 – 799 $1,500
575 – 624 $3,750
550 – 574 $5,000
500 – 549 $7,500

How Does Missouri Define “Small Loan Company”?

The Missouri Division of Finance defines a small loan company as any individual or business entity who makes consumer credit loans, whether secured or not, in any amount over $500.

Who is Required to Purchase the Bond?

The Missouri Small Loan Company bond is only required for small loan companies who do not wish to submit audited company financial statements, prepared by a CPA, when renewing their business license.

How do Small Loan Companies Apply for a License in Missouri?

All Missouri small loan company regulatory license applications must be mailed to the following address:

Division of Finance
301 West High Street, Room 630
P.O. Box 716
Jefferson City, MO 65102

Small loan companies must complete the application in its entirety, and pay the appropriate prorated application fee based on the month the application is submitted:

Month Application is Submitted Application Fee
January $250.02
February $208.35
March $166.68
April $125.01
May $83.34
June $41.67
July $500
August $458.37
September $416.70
October $375.03
November $333.36
December $291.69

License Period – The Missouri Small Loan Company License expires on June 31 of each year and must be renewed before the expiration date

How Do Missouri Small Loan Companies Renew Their License?

Small loan companies should mail their completed renewal application to the following address:

Division of Finance
301 West High Street, Room 630
P.O. Box 716
Jefferson City, MO 65102

Small loan companies who do not submit audited company financial statements with their renewal application must purchase and maintain a $100,000 surety bond. The Missouri Small Loan Company License expires on June 31 of each year and must be renewed before the expiration date.

What are the Insurance Requirements for the Missouri Small Loan Company License?

Missouri does not require small loan companies to purchase any form of liability insurance as a prerequisite to obtaining a business license. Lenders who do not submit audited company financial statements with their renewal application must purchase and maintain a $100,000 surety bond.

How Do Missouri Small Loan Companies File Their Bond?

Small loan companies should mail the completed bond form, including the power of attorney, to the following address:

Division of Finance
301 West High Street, Room 630
P.O. Box 716
Jefferson City, MO 65102

The small loan company surety bond requires signatures from both the surety company that issues the bond and a representative from the lending company. The surety company should include the following information on the bond form:

  • Name and location of entity/individual(s) buying the bond
  • Surety company’s name
  • Date the bond is signed

What Can Missouri Small Loan Companies Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, small loan companies in Missouri must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

  • Do not engage in any acts of fraud
  • Faithfully adhere to all contractual obligations

What Other Insurance Products Can Agents Offer Small Loan Companies in Missouri?

Missouri does not require small loan companies to purchase any form of liability insurance as a prerequisite to conducting business. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Missouri Small Loan Company Customers?

Missouri conveniently provides a public database to search for small loan companies in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2021-12-28T15:19:37-05:00