BMC-84 Bond vs BMC-85 Trust Fund

A BMC-84 is a surety bond where a surety company guarantees you for $75,000 and you pay an annual premium of 1.25-15% ($938-$11,250). A BMC-85 is a trust fund where you deposit the full $75,000 in cash, Treasury bonds, or irrevocable letters of credit at a qualifying financial institution. Both satisfy the FMCSA financial security requirement for freight broker authority.

For most brokers, the BMC-84 bond is far cheaper. With decent credit (680+), you pay $938-$2,438 per year instead of tying up $75,000. Even with poor credit and a $11,250 annual premium, you still keep $63,750 in working capital compared to a trust. The BMC-85 only becomes cost-competitive if you have excellent credit, $75,000 in idle cash, and plan to operate for many years.

Effective January 16, 2026, the FMCSA now requires BMC-85 trusts to be held only at institutions regulated by the OCC, FDIC, NCUA, or equivalent state regulators. This means banks, credit unions, and thrift institutions only. Loan companies, finance companies, and other non-bank entities that previously offered BMC-85 trusts are no longer eligible. The majority of existing BMC-85 providers were disqualified by this rule.

Yes. Apply for a BMC-84 surety bond, and once it is filed with the FMCSA and shows active, you can close your BMC-85 trust. Coordinate the timing so there is no gap in coverage - operating without active financial security even briefly can trigger authority suspension. Most surety companies can issue a BMC-84 bond within 24-48 hours.

Your freight broker authority is suspended immediately. Under the 2026 rules, the FMCSA can suspend your operating authority within 7 business days of a lapse in financial security. You cannot legally arrange transportation while suspended. Reinstatement requires filing new financial security and paying any outstanding fees. Operating without authority carries substantial per-violation penalties (up to $16,000+ per violation, adjusted annually for inflation).

If a claim is paid against your bond or trust that reduces it below $75,000, you have 7 calendar days to restore the full amount. With a BMC-84, your surety handles claim payments and you reimburse them under your indemnity agreement. With a BMC-85, you must personally deposit additional funds into the trust within 7 days. Failure to replenish triggers authority suspension.

For a BMC-84 bond, yes - all business owners (and their spouses) must sign a General Indemnity Agreement personally guaranteeing the bond. For a BMC-85 trust, you deposit the full $75,000 upfront, so there is no personal guarantee in the same sense. However, the trust fund agreement typically includes provisions that prevent you from withdrawing funds while your authority is active.

It depends on the trustee institution and how the trust is structured. Some banks allow the $75,000 to sit in an interest-bearing account, though yields on trust accounts are typically modest. Any interest earned may partially offset the annual trustee fees (usually $500-$1,500/year). Even with interest, the opportunity cost of tying up $75,000 almost always exceeds a BMC-84 bond premium for brokers with reasonable credit.