Will Surety Companies Push Agents Into Bail Premium Fee Financing?

[Bail Bond Lenders]

This is a good question and I will tell you why. I was on the phone on
more than one occasion with more than one surety company when I heard
something very eye opening. All along we thought that our service only
benefited bail bond companies. After these conversations we realized
that our system is not just for helping agents reduce their lending
risks and make extra cash.

The way it was explained to us is that some part of the rates that
States charge surety companies is based on the bond default rates for
the state in general and for that company specifically. If you are a
surety and your bonds default more than normal, you may pay higher
than average costs to the state. At least this is our interpretation
of what was said.

We were told that surety companies along with the bail professionals
they underwrite would greatly benefit from removing risk caused from
extending credit on the premium fees. If the agents are getting the
entire premium in cash upfront and not wasting time with credit
management and collections the whole system becomes more profitable
across the board.

If a surety company can push a bail agent into running bail applicants
through our underwriting systems they benefit in multiple ways.

1.) The surety knows the bail company has a higher profit margin per
written bond and can adjust the rates they charge.
2.) The surety can push the agents under their influence into making
the whole industry safer and more profitable, thereby lowering their
own costs with the State.
3.) The surety can push their commission tracking link (provided by
us) to their agents and have them refer clients to apply for loans
through that surety's link instead of the agent's.
4.) Surety companies can profit from the referral commissions we
provide to them.

Tell us what you think? Is this the reality of the industry or were we
misinformed?