Pawnbroking business; application for 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 arranges 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 a permit from the competent authority. The permit may be subject to conditions insofar as this is necessary to protect the general public or the pledgers.

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

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

• You must provide proof 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 pawnshops, the question of possible environmental hazards caused by the parking areas of the vehicles must be clarified.

Permission will be denied if:

• facts justify the assumption that the applicant does not possess the reliability required for the business operation.
  As a rule, this reliability is not possessed by anyone who has been convicted of a crime, theft, embezzlement, extortion, fraud, embezzlement, forgery of documents, receiving stolen goods, usury or an offense against the law against unfair competition in the five years preceding the application.
• the applicant does not provide evidence of the funds required for the business operation or corresponding collateral.

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

• Identity card or comparable identification document (copy)
• Non-EU citizens: residence permit (copy)
• Proof of the legal form of the company
  • Company headquarters 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))
  • Company domicile abroad: Documents from this country that prove the legal form.
• Proof of personal reliability
  • Resident 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 proving that you have the personal reliability 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 operation
  • Resident 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 rooms intended for commercial use

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

• § 34 Trade Regulations (GewO)
• Ordinance on the business operations of commercial pawnbrokers (Pawnbrokers' Ordinance - PfandlV)

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

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

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

The pawnbroker is obliged to keep accounts.