There are about $25 billion in bail bonds that are issued every year in the United States. This means there are more than $2 billion in fees that can be collected. The amount of available fees has increased by 50% over the last decade. This means knowing how to start a bail bonds business could be quite lucrative.
The bail bonds business is pretty simple. If someone is arrested for a crime and has bail set during their arraignment, then this amount is placed with the justice system as a security deposit. If you show up for your next court date, then you get the cash back. If you don’t show up, then you forfeit the money. Since bail can be set in virtually any amount, many individuals don’t have the entire amount for bail that is required. That’s where the bail bonds business steps in to help.
For 10-15% of the bail amount plus a fee that may be up to 10%. On a $10k bail order, that means a business may request $2,500. Collateral may also be requested since a failure to show would mean the bail bonds business would have to pay the full $10k. Here are the steps you’ll need to follow to open the business.
1. Secure your capital.
You’ll need money to make money with a bail bonds business. Most jurisdictions allow for fees and collateral to be required to provide the bond, as well as co-signers that are employed to collect any losses, but there will always be the risk of default. Have liquid capital on hand to bail people out, choose clients wisely, and you’ll be able to limit your risks of running out of cash because people are skipping town.
2. Get licensed.
The licensing requirements for a bail bonds business will vary from community to community. Some have minimum age requirements for the ownership. Others may require specific training, certification, and other items that provide evidence of knowledge within the industry. A background check, a credit check, and fingerprinting are almost always required. Some laws even require certification as a private detective or have law enforcement experience. You’ll also need a business license in addition to your bail bonds license.
3. Make sure your insurance is in order.
One of the easier ways to limit your risks as a bail bonds business is to have a comprehensive insurance policy. Combined with the collateral that is collected from clients, this can limit the amount of loss that may be experienced should a client skip out on their court hearing. Each state has specific regulations regarding the insurance policies that must be carried. Some may even require bonding.
4. The location of your business matters.
Successful bail bonds businesses are located near a courthouse, police station, or other justice system location. Once a bail order is issued, most families are going to want to immediately proceed in getting their loved one out of jail. If they leave the courtroom and seen your bail bonds business across the street, then that’s where they will likely go. Secure a commercial location. Do not run this business out of your home.
5. Make sure people know that you’re open for business.
Although courts are in session during regular business hours, the ability to post bail may be able to happen at any time. You can set whatever hours that you want, but when you are open, you’ll want the local community to know about it. Consider advertising your services on billboards near the courthouse or police station with a big, bold phone number that is easy to remember.
6. Get your company added to the list.
Many criminal courts maintain a list of local bail bonds businesses. Make sure that your company gets on this list so that you can be considered when there’s a need to get someone out of jail. Having a relationship with the local bail bonding unit doesn’t hurt either.
Knowing how to start a bail bonds business might be pretty basic, but the profit potential is pretty high. With an average of 300 clients at $1,000 per client, that’s a six figure income that can be generated from an average bail amount of just $10k. If that sounds like something you’d like to consider, then follow these steps to get your new business venture up and running.
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