Every freight broker and forwarder must show the federal government $75,000 in security to get authority. You can do this two ways: a BMC-84 surety bond or a BMC-85 trust fund. Here is the difference and why most brokers choose the bond.

The BMC-84 is a surety bond

With a BMC-84, you buy a surety bond. You pay a yearly premium, often around 900 to 3,000 dollars depending on your credit. Your 75,000 dollars of coverage is in place, but your cash stays in your business. If a carrier is not paid and files a valid claim, the bond pays, and then you repay the bond company.

The BMC-85 is a trust fund

With a BMC-85, you tie up the full 75,000 dollars in cash or assets in a trust. There is no yearly premium, but that money is locked away and cannot be used to run or grow your business. For most brokers, that is a steep price.

Why most brokers pick the bond

Cash flow is everything for a broker. The BMC-84 keeps your 75,000 dollars free for fuel, payroll, and growth, while still meeting the rule. You pay a manageable yearly premium instead of freezing a large sum. That is why the surety bond is by far the more popular choice.

When a trust might make sense

If a broker cannot qualify for a bond and has cash to spare, the trust is a backup. But for most, the bond is cheaper in real terms because your money keeps working.

Junno Surety writes BMC-84 bonds, even for brokers some agencies turn down. We file electronically with the FMCSA, often the same day. Send us your details and we will get you moving.

Related guide: Read the Freight Broker Bond guide.