When it comes to lending people money, businesses often like to take something as collateral. However, some people have never needed to give anything as collateral before, and so, it’s understandable that they do not know what collateral is.
Collateral is something of value that is equal to the amount of money borrowed and is offered to a company as insurance that the money owed will be paid back. An example of this would be as follows: Jennifer borrows $150 from Tom. She promises to pay him back within a week, but if she fails to do that, he can keep her phone. In this example, the phone is considered collateral for the friendly loan. If Jennifer failed to pay Tom back, then he would take her phone as payment. However, if she paid him back the full $150 dollars, then she would get to keep her phone. This is how collateral is used with businesses and loans, but on a much larger scale.
Collateral at Palmdale Bail Bondsman & Bail Bonds
At Palmdale Bail Bondsman & Bail Bonds, we do not usually require collateral on most of our bonds. Instead, we simply need our client’s signature as collateral. This means that when you get a bail bond with us, you simply sign a contract saying you will pay off the price of the bail bond. When you get a bail bond from us, you will not need to put something valuable up as collateral, meaning you do not have to risk losing something important.