Pawnbroker Bonds
A Pawnbroker Bond is a type of surety bond required by state or local governments for businesses that buy, sell, or lend money on personal property. This bond protects consumers and ensures pawn brokers operate legally, ethically, and in compliance with all applicable laws.
Apply below, call our Commercial Department at 407-786-7770 or email us at [email protected]
Why You Need a Pawnbroker Bond
A Pawnbroker Bond is required to:
- Obtain or maintain a pawn broker license
- Protect consumers from unfair or illegal practices
- Demonstrate financial responsibility
- Comply with state and local regulations
- Avoid fines, penalties, or license suspension
Operating without a required bond may result in denial or revocation of a pawnbroker license.
Pawnbroker Bond FAQs
These are some of the most common questions asked about Pawnbroker Bonds and how they work.
A Pawnbroker Bond guarantees that a licensed pawn broker will follow state and local regulations governing pawn transactions. The bond provides financial protection to consumers and regulatory agencies if the pawn broker engages in fraud, unlawful practices, or fails to meet legal obligations.
If a valid claim is filed, the surety may pay damages up to the bond amount, and the pawn broker is required to reimburse the surety.
The cost of a Pawnbroker Bond is a small percentage of the total bond amount, typically 1%–5% annually, depending on:
State or local bond amount requirements
Applicant’s credit history
Business experience and financial stability
For example, a $10,000 Pawn Broker Bond may cost between $100 and $500 per year.
Pawn Broker Bonds involve three parties:
Principal: The pawn broker or pawn shop owner
Obligee: The state, county, or city requiring the bond
Surety: The bonding company issuing the bond
If the pawn broker violates regulations or causes financial harm, a claim may be filed. The surety investigates and pays valid claims, and the pawn broker must reimburse the surety.
Pawnbroker Bonds are typically required for:
Pawn shops
Pawn lenders
Businesses buying or selling secondhand goods
Precious metal and jewelry buyers (in some states)
Any business required by law to hold a pawn broker license
Bond requirements, amounts, and filing agencies vary by state and municipality.
Call us at 407-786-7770 or email us at [email protected]