How to start a bail bond business

Take the licensing course and pass a bail bonding licensing exam. This is a requirement in most states.

The course covers all the information you need to know for the bail bond state exam. It also covers these areas in particular:

• Your state's laws concerning bail bonds

• Your state's practices concerning bail bonds

• The information you need to complete your licensing application

There are a few states that do not require this step; however, it is still a good idea because it can help you gain the necessary knowledge needed to run a bail bond business.

You also have the opportunity to network with those in the bail bond field by taking this course, many of your teachers are likely to have many years of experience to pass on to you.

After you complete the course you must then pass the bail bond licensing exam. In many states, you are given one hour to answer 50 to 60 multiple-choice questions. These questions cover the scope of bail bond law, practices, and other general knowledge.

Apply for a state license. After you have taken the course and passed the exam, you are eligible to apply for your state bail bond license.

You can find the application by visiting your state's department of insurance website. Along with your application, most states also require that you submit:

• Payment for a licensing fee

• The scores you obtained on your licensing exam

• Proof of sponsorship from a surety company

• A surety bond (the amount will vary depending on your specific state)

It is important to note that bail bond licensing requirements must be renewed every one to three years. Certain states require you to take continuing education courses to renew your state bail bond license.

Find a reputable surety company. This is a very important step in starting a bail bond business.

There are certain risks to running a bail bond business. When your business posts bail on behalf of a client, that money is returned to your business when the client appears for their court date.

Set up a bail bondsman merchant account. This is a feature that allows you to process your clients' payments simply and quickly.

Compared with most other small businesses, bail bond businesses experience a high amount of risk. There is the risk we already touched on - if your client fails to appear in court - but there are other risks to consider, including:

• Fraud

• Higher chargeback rates

• Clients that refuse to pay

This sometimes makes it complicated when seeking underwriters to approve your account. Meaning banks don't usually want to work with high-risk businesses, so your best bet is to apply for a high-risk merchant account.

This makes your payment process simple and also has the great benefit of minimizing some financial risks of your bail bond business.

You need to find a good fit in terms of online credit card processing, and then submit an application for a high-risk merchant account. You will need the following information:

• Banking information

• Credit score/credit history

• SSN or EIN (Employment Identification Number)

• A history of sales and chargebacks, if this applies

• A functional online website