Pawnbroker ($20,000) Bond - Statewide in California

Brief Summary

The $20,000 bond is one of two financial filings a new California pawnbroker makes, and the one most applicants hear about. You also need $100,000 in liquid assets or a separate $100,000 bond. This bond is a two-year nonrevokable filing made with your local police chief or sheriff, and it is required before the license is issued and at each renewal.

California Financial Code 21303 requires every pawnbroker license applicant to file a $20,000 two-year nonrevokable surety bond, executed by an admitted surety in favor of the State of California, with the local licensing authority before the license is issued or renewed. The licensing authority is the chief of police, the sheriff or, where appropriate, the police commission. The bond protects pledgors whose pawned property cannot be redeemed because of the pawnbroker's criminal conduct.

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How to Apply for a Pawnbroker ($20,000) Bond:

• Contact your local police chief, sheriff or police commission to start the pawnbroker license application.
• Complete Live Scan fingerprinting so DOJ can run the background check.
• Obtain the $20,000 two-year nonrevokable surety bond in favor of the State of California and file it with the local licensing authority.
• File the $100,000 liquid assets financial statement, a $100,000 surety bond or a qualifying deposit for each licensed business, unless the 21304 exemption applies.
• Complete eight hours of approved prelicensing education.
• Renew every two years and file the bond again with each renewal.

Detailed Information About the California Pawnbroker ($20,000) Bond:

Two financial requirements, not one

The $20,000 bond in Financial Code 21303 is separate from Financial Code 21304. Under 21304, a new applicant must also file a financial statement showing at least $100,000 in liquid assets for each licensed business, signed under penalty of perjury and reviewed by a California certified public accountant. Instead of the financial statement, the applicant may post a nonrevocable $100,000 surety bond or make a deposit under Code of Civil Procedure 995.710. The 21304 requirement does not apply to a person holding a secondhand dealer license under Business and Professions Code 21641 or 21642 who was actively engaged as a pawnbroker on the effective date of that section. That exemption is written into 21304 only.

Who issues the license and holds the bond

Pawnbroker licenses are granted locally. Financial Code 21300 directs the chief of police, the sheriff or, where appropriate, the police commission to accept the application and grant the license. The bond is filed with that licensing authority but runs in favor of the State of California and must be written by an admitted surety. The local agency submits the application to the Department of Justice, which runs a fingerprint background check and returns the results and a license number. DOJ charges a processing fee under Business and Professions Code 21642.5, and the local agency may charge a fee that does not exceed its actual processing costs.

What the bond covers

The bond is for the benefit of pledgors when pledged property is not available for redemption because of the criminal negligence, criminal malfeasance or other criminal conduct of the pawnbroker, and the pledgor has met the conditions for redemption under the loan contract.

Term and renewal

The bond is a two-year nonrevokable bond. A pawnbroker license is renewable the second year from the date of issue and every other year after that, and filing the bond is a condition of each renewal. Licenses cannot be transferred or assigned under 21305.

Education

On and after January 1, 2026, Financial Code 21303.5 requires at least eight hours of prelicensing education approved by the California Pawnbroker Education Council before a new license is issued, and eight hours of approved continuing education for renewal. Passing the course does not replace the bond. That section remains in effect until January 1, 2029.

Eligibility and Requirements for a California Pawnbroker ($20,000) Bond:

• Bond amount of $20,000 under Financial Code 21303.
• Executed by an admitted surety in favor of the State of California.
• Two-year nonrevokable term.
• Filed with the chief of police, sheriff or police commission that issues the license.
• Separate $100,000 liquid assets, bond or deposit requirement under Financial Code 21304.

California Pawnbroker ($20,000) Bond FAQs:

Official and Additional Resources for the California Pawnbroker ($20,000) Bond: