How to get a California Finance Lender or Broker License

How do I get a finance lender or broker license in California?

Step 1: Ensure you meet the eligibility requirements.

You must meet the following requirements before applying for a California finance lender or broker license.

• If you're only a broker, you must have and maintain a minimum $50,000 net worth. If you're a lender and broker, you must have and maintain a minimum $250,000 net worth.
• You and your officers/owners/control people must not have committed an act involving dishonesty, fraud, or deceit related to a licensed activity.
• If you've offered or sold any security in California that requires a securities notice filing with the DFPI (including under Corporations Code sections 25102 or 25102.1), you must ensure the filing has been made.

For more information on eligibility requirements, review the DFPI frequently asked questions for corporate securities law.

Step 2: Purchase your California finance lender or broker surety bond.

You must file and maintain a surety bond of at least $25,000 to comply with finance lender or broker licensing requirements outlined in Financial Code Section 22112. You can apply for your California finance lender or broker bond online 24/7 with annual premiums starting at $250.

Your finance lender or broker surety bond amount is based on your aggregate loan volume.

Step 3: Complete your California finance lender or broker license application.

A duly authorized individual who has submitted an Individual (MU2) Form or has been delegated to attest to the filing by an individual who has submitted a Individual (MU2) Form must complete the Company (MU1) Form in the Nationwide Multistate Licensing System (NMLS), which serves as your electronic license application. MU2 individuals can be an owner, officer, or control person of the company.

• Enter your primary company contact and primary consumer complaint contact in the Contact Employees section.
• List your Resident/Registered Agent under the Resident/Registered Agent section. Your registered agent must be located in California and match the information on record with the California Secretary of State.
• Upload all documents to the Documents Uploads section of the form in NMLS. Documents must be uploaded before or at the time you submit your application. Documents required to be mailed to the DFPI must be received within 5 business days of your electronic NMLS application submission.

Review the CA-DFPI California Financing Law License New Application Checklist.

Step 4: Upload your business plan.

Under the Company (MU1) Form Document Uploads section, you must upload your business plan, which must be titled CA CFL [Company Legal Name] Business Plan.

1. Clearly state your license type (lender, broker, or lender and broker) at the top of the business plan.
2. Describe in detail all business you will conduct under this license.
3. Provide the operating structure you intend to employ.

You must also include the following information.

• Your intended sources of capital
• Your intended market for loans, including the credit worthiness of intended borrowers
• Your intended methods for marketing loans
• Your anticipated loan terms
• Your methods for disbursing funds to borrowers
• Any products or services offered or required in connection with loans
• Any cobranding or joint agreements with other organizations related to loans
• Whether any other business is solicited or engaged in at the same place as the proposed lending activity
• Whether (and to what extent) you intend to use third parties to perform any lending functions (such as marketing, underwriting, or servicing)
• Whether you intend to retain or sell loans, in whole or in part, and the intended purchasers (if applicable)

Step 5: Upload your financial statements.

You must provide an unaudited financial statement dated within 90 days of your application date. Upload your financial statement separately under the Filing Tab and Financial Statement submenu link.

• If you're licensed as a residential mortgage broker and lender, your financial statement must reflect the required $250,000 minimum net worth.
• If you're licensed as a residential mortgage broker only, your financial statement must reflect the required $50,000 minimum net worth.
• If you're licensed to offer nonresidential lending or brokering, your financial statement must reflect the required $25,000 minimum net worth.

Review the NMLS Financial Statements Guide for further instructions.

Step 6: Upload your certificate of authority/good standing.

This requirement applies to all applicants (corporations, limited liability companies, limited partnerships, and trusts). Your certificate of authority/good standing from the California Secretary of State must meet the following requirements.

• Include your legal name
• Not be dated more than 60 days before your NMLS application filing
• Demonstrate you're authorized to transact business in California
• Be titled CA Certificate of Authority or CA Certificate of Good Standing

Upload your file under the document type Certificate of Authority/Good Standing Certificate in the Document Uploads section of the NMLS Company (MU1) Form.