Missouri Surety Bonds
My business training company has trained over 1700 small Missouri business owners in the last 3 years. I conduct business training seminars in St. Louis, Kansas City, Springfield, Cape Girardeau, Kirksville, Columbia, St. Charles, Independence, Chillicothe, and St. Joseph. All the business owners I speak with agree that it is incredibly expensive to start a new business in Missouri because of our State's restrictive surety bond requirement. I want to change that.
Before opening many businesses in Missouri you may be required to obtain a surety bond. A surety bond can be purchased from an insurance agent and the price of a surety bond is dependent on your credit score. If you have impeccable credit, the surety bond may only add a few hundred dollars to your business start up costs. But if you have even a small blemish on your credit score, a surety bond can cost tens of thousands of dollars. Your bond must also be renewed every year which will add substantially to your yearly business operational costs. Missouri's bonding requirement can be very cost prohibitive for business owners while generating no revenue for the State.
For example, if you are opening a retail business in Missouri you will be required to apply for a Missouri Sales Tax ID Number. Before you can apply for a Missouri Sales Tax ID Number the State of Missouri will require you to obtain a bond for three times the amount of your monthly gross sales average. If your retail sales are estimated to be $50,000 a month, you will be required to obtain a $150,000 surety bond. If you have a credit score of less than 700, a $150,000 surety bond could cost you nearly $25,000 to obtain the bond for the first time, and an additional $25,000 per year to renew the bond.
I have spoken with countless entrepreneurs that possess drive, ambition, hard work ethic, and an excellent business idea that were financially unable to open a business because a slight blemish on their credit score added thousands of dollars to their startup costs. Missouri needs as many businesses as possible to create new Missouri jobs and we can't punish business owners with less than perfect credit.
We also need to make sure Missouri has an excellent business start up environment that is appealing to out of state businesses searching for a new state for their business. Businesses are leaving cost prohibitive states and we must reduce business startup costs to lure these businesses to Missouri. If a business owner is researching new states for business we must make Missouri as attractive as possible, so we can be chosen over other states with more restrictive business startup costs.
As your Missouri State Representative I will introduce legislation that will place a cap on Missouri's surety bond requirement at $25,000. This will allow any Missouri business that is required to provide a surety bond to present a bond in the amount of $25,000 or less. Reducing Missouri's cost prohibitive surety bond requirement will lead to an explosion of new businesses. This will create new Missouri jobs.
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