Pawn shops are often referred to as the poor man’s bank. People use pawn shops to get cash to pay short term bills and other financial obligations. Pawn shop owners offer loans in exchange for goods. The goods are taken as collateral and the customer is given the cash; the pawn shop charges a fee for holding the merchandise. If the person is able to repay the loan with interest and fees in the time agreed, he will receive the goods back. If the customer does not return to pay the fees, the goods become the property of the pawn shop. Having a pawn shop in North Carolina can be a profitable business but you must obtain a license and be of good moral character as defined by the law.
Things You'll Need
- State Privilege License application
- Start-up capital
- $5000 surety bond
Obtain a North Carolina Pawnbroker State Privilege License Application. The application can be downloaded from the North Carolina Department of Revenue website.
Submit the completed application to the Department of Revenue. There is an application fee of $250 that must be paid at the time the application is submitted. During business hours, you can contact the revenue department by calling, (877) 308- 9103.
Find a location for your business. Search for a location that is centrally located but in an area where the residents will have a need for your services. Your space does not have to be large. You just need enough space for product display and necessary security shields.
Complete a petition in the county where you plan to open your business. Your petition must be in writing and convey your interest in opening a pawn shop. In the petition, you will be required to provide the business name and address. You will also be required to include a financial statement that outlines your assets and start-up capital. If you are working with a certified public accountant, he can prepare the financial statement for you.
Obtain an affidavit to be submitted along with your petition. The affidavit will need to certify that you do not have any recent felony convictions. You will not be able to open a pawn shop in North Carolina if you have been convicted of a felony within the past 10 years. The affidavit can be issued from a local law enforcement agency.
File surety bond. Once you obtain your license, you will have to file a bond of $5,000 to the county of your business. The bond must be executed by you as the business as well as two sureties. You must use a surety company that is licensed to do business in North Carolina.