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Starting a Pawn Shop Business

Q. I would like to start a small home based pawn shop in a small town in Quebec, my land is zoned for business, what permits or licenses would I need to ask for and or can I start my business first so i can raise the money I need to get it started.--Bill

Advice by Nach Maravilla

A. Dear Bill,

A Pawn Shop is considered a financial institution and its main activity is loaning money to people who offer an acceptable item as a collateral. The shop normally earn its revenues from the interest that it collects from individual borrowers and also on profits from sales of unclaimed collaterals.

For your permits and licenses, you can inquire about the requirements at your town hall. Since Pawn Shops store pawned items in their premises during the contract period, it is usually required to post a "bond" as a protection to its customers and also yourself.

This is one business which require a big start-up capital even if you operate it from your home. It is virtually impossible to start the business with nothing.

People also go to pawn shops whom they have confidence and trust that their pawned items will be safe. Meaning, the shop must project an image of financial stability. It will be difficult to start this business without the money.

Thank you for being part of Power HomeBiz Guides.

About the PowerHomeBiz.com Guide: 

Nach Maravilla is the Publisher of Power Homebiz Guides. He has over thirty years experience in sales and marketing of various products, which covered as he jokingly describes, "from toothpicks to airplanes"  He also had extensive experience in International trading and he always excelled in special promotional ideas for  retail outlets. 

The opinions expressed in this column are those of the author, not of PowerHomeBiz.com. Users should not treat the Guide's response as legal, accounting, or professional advice as all answers are intended to be general in nature. Such advice can only be properly given by qualified professionals who are fully aware of a user's specific geographical areas or circumstances, such as an attorney or accountant.