Each ARC accredited agency must initially provide which of the following financial instruments?

Each ARC accredited agency must initially provide which of the following financial instruments?

• A. $5,000 Financial Instrument
• B. $20,000 Financial Instrument
• C. $50,000 Financial Instrument
• D. $100,000 Financial Instrument

Answer: (B)

ARC uses this financial instrument as a security to back an agency’s obligations and protect suppliers and ARC during settlement. For new ARC-accredited agencies, the standard minimum is twenty thousand dollars. This amount provides a practical cushion for typical settlement liabilities while still being feasible for a newly onboarding agency. It helps establish credibility with ARC and travel suppliers without imposing an excessive burden on startups. The instrument can take the form of cash, a bank letter of credit, or a surety bond, and ARC holds it as collateral during the accreditation period. As the agency proves reliable in settlement and performance, ARC can review and potentially reduce or release the instrument per policy. That balance—enough protection without overburdening a new agency—explains why twenty thousand dollars is the correct requirement.

ARC uses this financial instrument as a security to back an agency’s obligations and protect suppliers and ARC during settlement. For new ARC-accredited agencies, the standard minimum is twenty thousand dollars. This amount provides a practical cushion for typical settlement liabilities while still being feasible for a newly onboarding agency. It helps establish credibility with ARC and travel suppliers without imposing an excessive burden on startups.

The instrument can take the form of cash, a bank letter of credit, or a surety bond, and ARC holds it as collateral during the accreditation period. As the agency proves reliable in settlement and performance, ARC can review and potentially reduce or release the instrument per policy. That balance—enough protection without overburdening a new agency—explains why twenty thousand dollars is the correct requirement.