Pawnbroking business; application for a license

If you want to work commercially as a pawnbroker or pawnbroker, you need a license.

The pawnbroker grants a loan of money against the deposit of a pledge to secure the loan together with interest and the costs of business operations.

The pawnbroker brokers pawn transactions by granting an advance on pledges handed over to him/her and pledging the pledges in his/her name with a pawnbroker.

Anyone wishing to operate the business of a pawnbroker or pawnbroker requires the permission of the competent authority. The permit may be subject to conditions if this is necessary to protect the general public or the pledger.

In the case of partnerships (e.g. OHG, KG), the trader is each managing partner. In the case of legal entities (e.g. GmbH, AG), the permit is granted to the legal entity.

If you want to work as a pawnbroker, you must provide special securities and evidence.

• You must provide evidence of the necessary funds or collateral for the first six months. This can be a credit balance or a bank guarantee.
• You must also take out insurance against fire damage, water damage, burglary and robbery and present it when submitting your application. A safe must be available for jewelry.
• You must secure your premises against burglary with an alarm system.
• In the case of car pawnbroking, the question of possible environmental hazards caused by the parking areas of the vehicles must be clarified.

Permission will be refused if:

• Facts justify the assumption that the applicant does not possess the reliability required for the business operation.
  As a rule, anyone who has been convicted of a crime, theft, embezzlement, extortion, fraud, breach of trust, forgery of documents, receiving stolen goods, usury or an offense against the law against unfair competition does not possess this reliability.
• the applicant does not provide evidence of the funds required for business operations or corresponding securities.

You must apply to the competent authority for a license to operate a business as a pawnbroker or pawnbroker.

After the examination, you will either receive the permit or a rejection notice. A permit may be subject to certain conditions.

You must apply for the permit before starting your business. You are only entitled to exercise the trade after the permit has been issued.

100 to 1,000 € in accordance with the Schedule of Costs under the Costs Act (Tariff No. 5.III.5/11.1)

The pawnbroker must notify the competent authority which rooms he/she uses for the business operation at the start of the business operation; furthermore, he/she must immediately notify any change of rooms used for the business operation.

The pawnbroker is obliged to keep records.

• The following documents may be required:
  • Identity card or comparable identification document (copy)
  • Non-EU citizens: residence permit (copy)
  • Proof of the legal form of the company
    • Registered office in Germany:
      • For registered companies: Extract from the commercial register and, if applicable, a copy of the articles of association (e.g. for a civil law partnership (GbR))
    • Registered office abroad: documents from this country proving the legal form.
  • Proof of personal reliability
    • Residence in Germany:
      • Certificate of good conduct
      • Extract from the central trade register for natural persons and, if applicable, legal entities
    • Residence abroad: Documents from your home country that prove that you are personally reliable to perform the desired service
    • In individual cases, the authority may request further documents that are suitable for making a statement about your personal reliability as an applicant.
  • Proof of the funds and securities required for the business
    • Residence in Germany:
      • Extract from the debtor register
      • Information from the insolvency register
    • Residence abroad: Documents from your home country as proof that you have the necessary funds and collateral
  • Proof of insurance
  • Floor plan of the premises intended for the business