When you are required to post a bond, it can be confusing trying to figure out what type of bond you need. Do you need a cash bond or a surety bond? What’s the difference? In this blog post, we will explain the differences between cash and surety bonds, and help you decide which type of bond is best for you.

Surety Bonds vs. Cash Bonds

When you are facing charges and have to post bail, you may be wondering what your options are. Two of the most common types of bonds are surety bonds and cash bonds. Here is a look at the difference between the two:

Surety Bonds

With a surety bond, you work with a bail bond company. The company puts up the bail money for you and charges you a fee, usually around ten percent of the total bail amount. You then sign an agreement promising to appear in court. If you do not show up, the bail bond company will be on the hook for the entire bail amount.

Cash Bonds

With a cash bond, you pay the entire bail amount yourself. If you show up for your court appearances, you will get this money back. However, if you do not show up, you forfeit the entire amount.

What is a cash bond?

A cash bond is a type of security that is used to ensure that a person appears in court. It is also known as a surety bond. The band is made up of cash, which is deposited with the court. If the person fails to appear in court, the cash will be forfeited. A cash bond is usually used when a person is facing a criminal charge.

There are two types of cash bonds: judicial and executive. Judicial cash bonds are set by a judge during a court hearing. Executive cash bonds are set by the police or sheriff’s department when a person is arrested.

What is a surety bond?

Surety bonds are a type of insurance that protects the person or company who purchases the bond if the bonded party fails to meet their obligations. The surety company that issues the bond is financially responsible for any losses incurred by the purchaser up to the amount of the bond.

There are many different types of surety bonds, and the one you need will depend on your business and the specific regulations in your industry. Some common types of surety bonds include:

-License and permit bonds, which are required by many businesses to obtain a license to operate

-Construction contracts, protect against financial losses incurred by the property owner as a result of the contractor’s failure to complete the project

-Court bonds, which may be required by a court to guarantee that someone will show up for their court date or pay a judgment if they lose their case

What is the difference between a cash bond and a surety bond?

A surety bond is a three-party agreement between the principal (the person or business who is hiring the bonded company), the obligee (the entity requiring the bond), and the surety (the bonding company). The surety agrees to financially back the principal in case they fail to meet their obligations to the obligee. A cash bond is simply a deposit of money made by the principal to the obligee, which is held in case the principal fails to meet their obligations.

Advantages of Cash Bonds

Cash bonds have several advantages over other types of bonds. Perhaps the most significant advantage is that they are immediately available to the court, which means that they can be used to secure release from custody more quickly than other types of bonds.

Disadvantages of cash bonds

While cash bonds have their advantages, some disadvantages should be considered. One of the biggest disadvantages is that cash bonds can be very expensive. If you are unable to post the full amount of the bond, you will likely have to pay a bail bond company a non-refundable fee, which can be several hundred dollars.

Advantages of Surety Bonds

Surety bonds offer several advantages for businesses and individuals. Here are just a few benefits of using surety bonds:

-They provide financial protection: If you are unable to meet your obligations, the surety company will step in and cover the costs. This can protect you from having to declare bankruptcy or liquidate assets.

-They can improve your credit score: Surety bonds show creditors that you are a low-risk borrower, which can lead to lower interest rates and better terms on loans.

-They demonstrate your commitment to your customers: By getting bonded, you are sending a message to your customers that you are serious about meeting your obligations and providing them with quality service.

-They can give you a competitive edge: In some industries, surety bonds are required to bid on projects or obtain licenses. Having a bond can help you win new business.

Disadvantages of Surety Bonds

The main disadvantage of a surety bond is the cost. The premium for a surety bond can be expensive, and the costs can add up quickly if you are bonding multiple projects. In addition, if you default on your payments, the surety company can cancel your bond and require you to pay the full amount of the bond. This can be a financial burden, especially if you are already struggling to make ends meet.