Maximum finance charges, minimum holding times, unredeemed pledge disposal, and many other important business metrics are regulated by these statutes and need to be complied with.
These limitations always vary from state to state and sometimes from city to city.
They are shocked to discover this is not the main business activity of a legal licensed pawnshop.
I always suggest to them to consider opening a secondhand store as opposed to attempting to meet the requirements to become a licensed pawnbroker. The main business activity of any pawnshop is providing short-term credit to consumers who in turn pledge personal property as collateral for the pawn loan.
Attempting to open a pawnshop business on a shoestring budget is a guaranteed recipe for disaster and failure.
The regulations you fall under based on your choice of location will have a major impact on how you choose to do your business.
Plus you should also consider having a marketing system in place to attract qualified customers into your pawnshop and keep them returning again and again.
Becoming a pawnbroker causes you to fall under a wide variety of federal, state, and local regulations.
Your shortcut to compliance here is to locate and do business with a forms printer who specializes in forms exclusively for the pawnbroking industry.
These companies aggressively stay informed of all the current federal, state, and local regulation required on the forms they produce.