Surety Bond Encyclopedia

Pawnbroking ($10,000) Bond - FL in Florida

Brief Summary

A Florida pawnshop license needs either $50,000 in net worth or $10,000 of security for each shop. The surety bond is the security option that keeps your cash free. You pay a yearly premium instead of tying up a certificate of deposit or a bank letter of credit, and the bond goes in with your registration application to the Florida Department of Agriculture and Consumer Services.

Under Fla. Stat. 539.001(4), a pawnbroker applicant must either show a net worth of at least $50,000 or file a $10,000 surety bond, certificate of deposit or irrevocable letter of credit for each license. A separate license is required for every pawnshop, so a three store operator relying on bonds needs $30,000 in total security. The bond runs to the Florida Department of Agriculture and Consumer Services and must be kept in force for the whole license period.

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How to Apply for a Pawnbroking ($10,000) Bond:

Decide whether you will qualify on a $50,000 net worth or post security of $10,000 for each license.
Count your pawnshops. Each location needs its own license and, if you bond, its own $10,000 bond.
Have the legal name of the applicant exactly as it will appear on the FDACS-10111 Pawnbroking Registration Application.
Provide owner details for the surety's credit review.
Pay the premium and receive the executed bond.
File the bond with the application, the $300 license fee for each license and the fingerprint analysis cost.
Renew the license each year and keep the bond in force for the full license period.

Detailed Information About the Florida Pawnbroking ($10,000) Bond:

The bond is one of two ways to qualify

Many applicants assume every Florida pawnshop must buy a bond. It is not that simple. Section 539.001(4) of the Florida Statutes lets an applicant qualify in one of two ways. The first is a net worth of at least $50,000, proven with a financial statement prepared by a Florida certified public accountant, a sworn net worth affidavit with supporting documents, or for a corporation its most recent federal tax return. The second is a $10,000 surety bond, or a certificate of deposit or irrevocable letter of credit in a Florida banking institution in the same amount, for each license.

The bond figure is per license, and the statute requires a separate license for each pawnshop. An owner who bonds instead of proving net worth posts $10,000 for every location.

Who regulates pawnshops

The licensing agency under the Florida Pawnbroking Act is the Florida Department of Agriculture and Consumer Services. Chapter 539 defines the agency that way, and the department's rule 5J-13.003 directs applicants filing a bond, letter of credit or certificate of deposit to use the forms included in FDACS-10111, the Pawnbroking Registration Application.

What the bond protects

The bond is written in favor of the department for the use and benefit of consumers injured by the pawnbroker's fraud, misrepresentation, breach of contract, financial failure or violation of the statute. A consumer files a written claim with the department within 120 days after the injury occurs, is discovered or a judgment is entered. Claims are submitted on form FDACS-10986, the Pawnshop Claim Affidavit, and total payouts cannot exceed the bond amount. If the surety pays, you repay the surety.

License term and fees

Each license is valid for one year. The licensee pays a $300 license fee for each license initially and every year after, plus the actual cost of fingerprint analysis on the first application. Section 539.001(6)(g) requires the licensee to keep the $50,000 net worth or the bond in place throughout, so a bond that lapses puts the license at risk.

How premium is set

The surety prices the bond from the owners' personal credit and the business's financial picture. Stronger credit generally means a lower annual premium. You get an exact quote before you buy.

Eligibility and Requirements for a Florida Pawnbroking ($10,000) Bond:

Bond amount of $10,000 for each pawnbroker license.
Florida Department of Agriculture and Consumer Services as obligee.
Bond filed on or with the forms included in FDACS-10111.
Applicant of good moral character with no disqualifying felony or theft, fraud or dishonesty conviction in the prior 10 years.
Security maintained continuously while the license is held.

Florida Pawnbroking ($10,000) Bond FAQs:

Do I need this bond if my business has a strong balance sheet?

Not necessarily. Fla. Stat. 539.001(4) lets you qualify with a net worth of at least $50,000 instead of the bond. You prove it with a Florida CPA financial statement, a sworn affidavit with supporting documents, or a corporation's latest federal tax return. Applicants who cannot or prefer not to make that showing post the $10,000 bond.

I own two shops. Is one bond enough?

No. Florida requires a separate license for each pawnshop, and the bond is $10,000 for each license. Two shops relying on bonds need $20,000 in total security.

Is the Office of Financial Regulation the obligee?

No. Chapter 539 names the Department of Agriculture and Consumer Services as the agency, and the bond is written in its favor.

Can I use a certificate of deposit instead?

Yes. The statute accepts a certificate of deposit or an irrevocable letter of credit in a Florida banking institution in the amount of the bond. Both tie up $10,000 per license. A surety bond costs only the annual premium.

How long does a customer have to make a claim?

A consumer must file a written claim with the department within 120 days after the injury occurs, is discovered or a judgment is entered, using form FDACS-10986.