This bond protects Iowa grain producers if a licensed grain dealer fails to pay for grain or becomes financially insolvent. Bond amounts are calculated based on financial deficiencies, with a $100,000 bond required for credit-sale contracts. It ensures grain sellers are compensated if the dealer goes out of business o…
Overview
What it is.
This bond protects Iowa grain producers if a licensed grain dealer fails to pay for grain or becomes financially insolvent. Bond amounts are calculated based on financial deficiencies, with a $100,000 bond required for credit-sale contracts. It ensures grain sellers are compensated if the dealer goes out of business o…
Who usually needs it
Grain dealers in Iowa who buy, receive, exchange, or store grain from producers and do not meet minimum financial requirements (Class 1 or Class 2 licensees). Also required for dealers issuing credit-sale contracts.
Pricing & timing
What to expect.
Generic pricing
License bonds are required by state and local governments to ensure compliance with industry regulations. Typical Pricing:. • Small bonds (under $25,000): Typically $100–$250 per year (flat fee). • Larger license bonds: Commonly around 1–5% of the bond amount annually. • Credit impact: Good credit: starting around 1–2% · Average credit: typically 2–4% · Credit challenges: often 4–5% or higher. Same-day approval is typical for many common license bonds. Some license bonds may price higher de…
Typical timeframe
Issuance timeframe varies by bond type and underwriting
Application
What to do next.
Tell us the bond name, state, and amount on your form.
Share business and applicant info so the team can quote it.
Sign and pay; we issue the bond and send you the documents.
Keep your effective date and renewal date on file with us.
Start the application.
You are on the exact bond page. The next step is to start the quick application.
StateIABond amount$100,000ObligeeIowa Department of Agriculture and Land StewardshipBond classLicense BondCategoryAgricultureBondIowa Grain Dealer BondPlain descriptionThis bond protects Iowa grain producers if a licensed grain dealer fails to pay for grain or becomes financially insolvent. Bond amounts are calculated based on financial deficiencies, with a $100,000 bond required for …Who needs this bondGrain dealers in Iowa who buy, receive, exchange, or store grain from producers and do not meet minimum financial requirements (Class 1 or Class 2 licensees). Also required for dealers issuing credit-sale contracts.
FAQ
Common questions.
How is the Iowa Grain Dealer Bond amount calculated?
The bond amount is based on your financial ratios and grain volume. If you're a Class 1 or Class 2 licensee who doesn't meet minimum financial requirements (net worth and current asset ratios), the bond covers the shortfall at $2,000 per $1,000 of deficiency, capped at $1 million. For grain dealers issuing credit-sale contracts, a fixed $100,000 bond is required. The Iowa Department of Agriculture determines the exact amount based on your financial statements.
Who needs an Iowa Grain Dealer Bond?
You need this bond if you're a licensed grain dealer in Iowa who buys, receives, exchanges, or stores grain from producers and your financial ratios fall below state minimums. Class 1 licensees need minimum net worth of $75,000 and current assets at least 100% of current liabilities. Class 2 licensees need $37,500 net worth with the same asset ratio. If you don't meet these thresholds, you must file a bond. Additionally, any dealer issuing credit-sale contracts must file a $100,000 bond.
What happens if I don't maintain the required financial ratios?
If your current assets fall below required levels, the Iowa Department of Agriculture will notify you of the deficiency. You have 30 days to either correct the financial shortfall or file a surety bond (or irrevocable letter of credit) covering the deficiency. If you don't comply within 30 days, your grain dealer license will be suspended. The bond ensures grain producers are protected even when your business faces financial challenges.
