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Tennessee Grain Dealer Surety Bond

A dealer holds grain in his hands

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The State of Tennessee Department of Agriculture, Division of Consumer and Industry Services, oversees the licensing of public grain warehouses, Grain Dealers, commercial feed, incidental grain dealer, seed dealer, agriculture liming materials and registering of commercial fertilizer distributors. The Tennessee Code Annotated Title 43 Chapter 32 Section 101 Tennessee Commodity Dealer and Warehouse Law, defines the licensure and surety bond requirements for a grain dealer class 1 or class 2.

Surety Bond and License Requirements:

  1. Complete the application and pay the applicable fee.
  2. Obtain fire and extended insurance in the amount to be determined by the commissioner.
  3. Obtain a minimum $20,000 surety bond to meet the security requirement or otherwise determined by the commissioner. Surety bonds will never exceed $600,000 annually. The surety bond may be waived if the business minimum net worth must be three times or more than the required bond amount set by the commissioner. A compiled financial statement for Class 2 or reviewed financial statements for Class 1 is required for the waiver.
  4. The formula to determine the surety bond amount is as follows:
  • Dollar amount of grain purchased from producers in last the 12 months $___ x 10% = a.) ____ (Round up to the nearest $1,000, Minimum is $20,000 maximum is $100,000)
  • Dollar amount of grain purchased & priced later, deferred price, or payment delayed (payment made more than 30 days from delivery= $______x 80% =b.) ______ (Round up to the nearest $1,000 & maximum $500,000)
  • Bond amount is the higher of: a., or b. or $600,000
  • Instead of a bond, a certificate of deposit or irrevocable letter of credit of a value equal to the bond may be deposited with the state.

    • How Much Will a Tennessee Grain Dealer Bond Cost?

    The premium that you pay for a Tennessee Grain Dealer Surety Bond is dependent on credit and the bond amount required. Our rates start at 1% of the bond amount with good credit. Applicants may also need to provide business and personal financial statements for bond amounts over $50,000.

    Did You Know?

    Accounts, books, papers and records can be audited by the Tennessee Department of Agriculture during any normal business hours.

    Related Links:

    Tennessee Grain Dealer Information
    Tennessee Grain Indemnity Fund

    More Surety Bond Questions?

    Check out our FAQ page or What’s a Surety Bond? page. Should you need or choose to buy a surety bond, buy from us. SuretyGroup.com has been underwriting surety bonds throughout the U.S. for more than 35 years. When you work with us, you enjoy the unique benefit of dealing with a team of highly experienced surety agents with in-house underwriting authority. This allows you to receive competitive, low rates, quick approvals, and immediate bond delivery. In most cases, your bond will be delivered within 24 hours after you apply for it.

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