After I closed escrow last year, on two laundromats, one of the tips I received, from this board was a Utility Bond. The bond is issued usually from your commercial insurance carrier. It can be a significant savings, especially @ startup.
But to my surprise, as my first anniversary is quickly approaching, I received a bill for the ANNUAL premium for the Utility Bond. It becomes much less of a deal & over time will be more expensive. IS this normal for Utility Bonds? [img]/ubbthreads/images/graemlins/confused.gif[/img]
When I bought my mat, several years ago, the gas and electric utilities each wanted a deposit, up front. They each wanted about 1.5 x their average monthly bill for this location. Not realizing that there was any alternative (nobody offered me a bond or insurance), I went ahead and paid them their deposits. At the time, it was a significant hit to the cash-flow.
After about one year, during which I paid every bill in full and on time, the deposits were refunded, with interest, as credits on the respective utility bills.
Dave Levenson, NJ
The Happy Launderer -- If you can't take the heat, stay out from behind my dryers!
Like Dave I had no idea of an alternative. I have not received a refund but get decent interest every year. I charged off the deposit as utility expense also. When I get my deposit back it will count as income..
You should contact your local utilities billing/accounting departments and ask that the deposit be waived, now that you have had 12 consecutive months of on-time payments. If they say yes, then you can cancel the bonds. Good luck!