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Florida Pawnbroker Bond: A Comprehensive Guide

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This guide provides information for insurance agents to help their customers obtain a Florida Pawnbroker Bond

At a Glance:

• Lowest Cost: $100 per year or $10 per month, based on the applicant’s credit
• Bond Amount: $10,000
• Who Needs it: All pawnbrokers who have a net worth of less than $50,000 operating in Florida
• Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
  
• Who Regulates Pawnbrokers in Florida: The Florida Department of Agriculture and Consumer Services

Background

Florida Statute 539.001 requires all pawnbrokers operating in the state to obtain a license with the Department of Agriculture and Consumer Services before conducting business. The Florida legislature enacted the licensing requirement to ensure that pawnbrokers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, pawnbrokers must have a net worth of at least $50,000 or purchase and maintain a $10,000 surety bond to be eligible for licensure.

What is the Purpose of the Florida Pawnbroker Bond?

Florida requires pawnbrokers who have a net worth of less than $50,000 to purchase a surety bond as part of the application process to obtain a pawnbroker license. The bond ensures that the public will be protected from financial harm if the broker fails to comply with the regulations set forth in Florida Statute 539.001. Specifically, the bond protects the public in the event the broker engages in any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the pawnbroker violates the terms of their license.m

How Can an Insurance Agent Obtain a Florida Pawnbroker Surety Bond?

BondExchange makes obtaining a Florida Pawnbroker bond easy. Simply log in to your account and use our keyword search to find the “Pawnbroker” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Not an agent? Then let us pair you with one!

Click the above image to find a BX Agent near you

Is a Credit Check Required for the Florida Pawnbroker Bond?

Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Florida Pawnbroker bond. Applicants with excellent credit and work experience can expect to receive the best rates. Applicants with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.

How Much Does the Florida Pawnbroker Bond Cost?

The Florida Pawnbroker bond can cost anywhere between $100 to $700 per year or $10 to $70 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $10,000 bond requirement.

$10,000 Pawnbroker Bond Cost

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*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

Who is Required to Purchase the Florida Pawnbroker Bond?

Florida requires pawnbrokers who have a net worth of less than $50,000 to purchase a surety bond as a prerequisite to obtaining a pawnbroker license. To paraphrase Florida Statute 539.001, a pawnbroker is a person who issues loans at interest to individuals that leave their property, as collateral, for the broker to sell or purchases goods for resale from a dealer/trader.

Instead of a surety bond, applicants for a pawnbroker license may choose to submit a certificate of deposit or an irrevocable letter of credit. Applicants with a net worth of greater than $50,000 are exempt from the bond requirement.

How Do Pawnbrokers Apply for a License in Florida?

Pawnbrokers in Florida must navigate several steps to secure a pawnbroker license. Below are the general guidelines, but applicants should refer to the Department of Agriculture and Consumer Services’ website for details on the process.

License Period – All Florida Pawnbroker Licenses are valid for one year from the date of issuance and must be renewed before the expiration date.

Step 1 – Purchase a Surety Bond

Pawnbrokers who have a net worth of less than $50,000 must purchase a surety bond.

Step 2 – Complete an Application

All Florida Pawnbroker License applications should be submitted to the Department of Agriculture and Consumer Services at the following address:

FDACS
P.O. Box 6700
Tallahassee, FL 32314-6700

Applicants must complete the form in its entirety, get it notarized, and submit the following items:

• • $300 application fee payable online or by check
  • $28.25 background investigation fee
  • Criminal conviction history within the last 10 years
  • A full set of the broker’s fingerprints
  • One of the following:
    • Surety Bond
    • Letter of Credit
    • Certificate of Deposit

Once the application is received and approved, the Department of Agriculture and Consumer Services will issue a license to the pawnbroker and they may begin conducting business.

How do Florida Pawnbrokers Renew Their License?

To renew their license, pawnbrokers should submit a renewal application to the Department of Agriculture and Consumer Services at the following address:

FDACS
P.O. Box 6700
Tallahassee, FL 32314-6700

All Florida Pawnbroker Licenses are valid for one year from the date of issuance and must be renewed before the expiration date.

What are the Insurance Requirements for Florida Pawnbrokers?

Florida does not require pawnbrokers to purchase any form of liability insurance. Pawnbrokers who have a net worth of less than $50,000 must purchase and maintain a $10,000 surety bond.

How Do Florida Pawnbrokers File Their Bonds?

Pawnbrokers should submit their completed bond forms, including the power of attorney, to the Department of Agriculture and Consumer Services at the following address:

FDACS
P.O. Box 6700
Tallahassee, FL 32314-6700

The surety bond requires signatures from both the surety company, including witness signatures, that issues the bond and from the broker. The surety company should include the following information on the bond form:

• Legal name and business address of the entity/individual(s) buying the bond
• Email address, telephone number, and fax number of the entity/individual(s) buying the bond
• Surety company’s name, address, and telephone number
• Surety company’s email address and fax number
• Date the bond is signed and goes into effect

What Can Florida Pawnbrokers Do to Avoid Claims Against Their Bonds?

To avoid claims against their bonds, pawnbrokers in Florida must ensure that they:

• Do not engage in any acts of fraud or misrepresentation
• Do not breach contracts made with consumers

What Other Insurance Products Can Agents Offer Pawnbrokers in Florida?

Florida does not require pawnbrokers to purchase liability insurance as a prerequisite to obtaining a pawnbroker license. However, most reputable businesses will purchase this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Florida Pawnbroker Customers?

Florida unfortunately does not provide a public database of active pawnbrokers in the state. However, we suggest contacting the  Department of Agriculture and Consumer Services for a list of licensed pawnbrokers. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

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