Brokering consumer or commercial loans affects the economy and lives of Californians, and therefore requires regulation. The State of California states the steps which must be taken to conduct business ethically and legally.
What is a Finance Broker? The state of California specifies; “A ‘broker’ is any person engaged in the business of negotiating or performing acts in connection with loans made by a finance lender. Brokers licensed under this law may only broker loans to lenders that hold a California Finance Lenders license.” You may find more about what defines a Finance Lender or Broker here.
Steps to Follow:
First: You must complete an application found here, to get started. The application should be turned in to the State of California Department of Business Oversight via mail or in-person. The application includes instructions and clarification.
Second: To be a finance lender in California, the individual must have a net worth of $25,000 to start doing business. There are affordable credit-building opportunities for lenders getting started in the industry; the state will issue 90-day repayment loans to get the ball rolling. You must have a license before being able to access this resource. You can find out more about this program here.
Third: After getting the license and figuring out how to build net worth, a licensee will need a surety bond in the event of a violation of California regulation. The bond protects the client seeking financial services from potential fraud, misrepresentation or other illegal business practices. Details about The Surety Bond Requirement may be found on the State of California website. The bond amount required is $25,000.
At Surety1, we offer competitive premium rates and would love to discuss the bonding process. Give Surety1 a call at 877-654-2327!