Detroit Pawnbroker Bond

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Detroit Pawnbroker Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Detroit Pawnbroker bond.

At a Glance:

  • Average Cost: $100 per year or $10 per month
  • Bond Amount: $3,000
  • Who Needs it: All pawnbrokers operating in Detroit, Michigan
  • Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
  • Who Regulates Pawnbrokers in Detroit: The Detroit Licensing and Permits Division
Detroit Pawnbroker Bond Form
Detroit Pawnbroker Bond Form


Detroit Code of Ordinances 41-2-21 requires all pawnbrokers operating in the city to obtain a license with the Licensing and Permits Division before conducting business. The Detroit City Council enacted the licensing requirement to ensure that pawnbrokers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, pawnbrokers must purchase and maintain a $3,000 surety bond to be eligible for licensure.

What is the Purpose of the Detroit Pawnbroker Bond?

Detroit requires pawnbrokers to purchase a surety bond as part of the application process to obtain a pawnbroker license. The bond ensures that the public will be protected from financial harm if the broker fails to comply with the regulations set forth in Detroit Code of Ordinances 41-2-24. Specifically, the bond protects the public in the event the broker engages in any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the pawnbroker violates the terms of their license.

How Can an Insurance Agent Obtain a Detroit Pawnbroker Surety Bond?

BondExchange makes obtaining a Detroit Pawnbroker bond easy. Simply log in to your account and use our keyword search to find the “Pawnbroker” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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Is a Credit Check Required for the Detroit Pawnbroker Bond?

No, a credit check is not required for the Detroit Pawnbroker bond. Because the bond is considered relatively low risk, the same low rate is offered to all pawnbrokers operating in the city, regardless of their credit history.

How Much Does the Detroit Pawnbroker Bond Cost?

The Detroit Pawnbroker bond costs just $100 per year or $10 per month.

Who is Required to Purchase the Bond?

Detroit requires pawnbrokers to purchase a surety bond as a prerequisite to obtaining a pawnbroker license. To paraphrase Detroit Code of Ordinances 41-2-1, a pawnbroker is a person who issues loans at interest to individuals that leave their property, as collateral, for the broker to sell on condition that the customer may repurchase the property within a fixed period of time. Internet drop-off stores are exempt from this bond requirement.

Detroit Pawnbroker Bond

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How do Pawnbrokers Apply for a License in Detroit?

Pawnbrokers in Detroit must navigate several steps to secure a pawnbroker license. Below are the general guidelines, but applicants should refer to the Licensing and Permit Division’s website for details on the process.

First-time applicants must create an account with the city’s Electronic Licensing and Permitting System (eLAPS) prior to applying for a license.

License Period – All Detroit Pawnbroker Licenses expire on October 31st of each year and must be renewed before the expiration date.

Step 1 – Purchase a Surety Bond

Pawnbrokers in Detroit must purchase and maintain a $3,000 surety bond.

Step 2 – Submit an Application

Pawnbrokers must first submit a completed application online via eLAPS. Brokers must complete the application in its entirety and submit the following items digitally:

    • Current government-issued identification
    • Articles of incorporation, if applicable
    • Building permit
    • Proof of ownership
    • Surety bond

Applicants may submit a lease contract or property deed to satisfy the proof of ownership requirement. Contact the Licensing and Permit Division for additional assistance in the application process.

Step 3 – Pay the License Fee

Once the application is approved, pawnbrokers will receive an invoice from the Licensing and Permit Division via their eLAPS account and may pay their $984 license fee at this time.

Step 4 – Submit the Required Clearances

After paying the licensing fee, pawnbrokers must complete and submit the following required clearances prior to being issued a license:

The Licensing and Permit Division will send out a checklist via email of the broker’s required inspections and clearances. Once all clearances and inspections are approved, pawnbrokers will be issued their licenses.

How do Detroit Pawnbrokers Renew Their License?

Pawnbrokers should submit a renewal application online via their eLAPS account to renew their licenses. Brokers are required to pay the annual $984 license fee and submit all required clearances prior to obtaining a renewal license. All Detroit Pawnbroker Licenses expire on October 31st of each year and must be renewed before the expiration date.

What are the Insurance Requirements for Detroit Pawnbrokers?

Detroit does not require pawnbrokers to purchase any form of liability insurance. Pawnbrokers must purchase and maintain a $3,000 surety bond.

How Do Detroit Pawnbrokers File Their Bonds?

Pawnbrokers should file their completed bond forms, including the power of attorney, with the Detroit Law Department online here.

The surety bond requires signatures, including witness signatures, from both the surety company that issues the bond and from the broker. The surety company should include the following information on the bond form:

  • Legal name and business address of the entity/individual(s) buying the bond
  • Surety company’s name and state of incorporation
  • Bond amount
  • License type
  • Date the bond goes into effect and expires
  • Date the bond is signed
  • Name and address of witnesses

What Can Detroit Pawnbrokers do to Avoid Claims Against Their Bonds?

To avoid claims against their bonds, pawnbrokers in Detroit must ensure that they:

  • Do not engage in any acts of fraud
  • Do not breach contracts made with consumers

What Other Insurance Products Can Agents Offer Pawnbrokers in Detroit?

Detroit does not require pawnbrokers to purchase liability insurance as a prerequisite to obtaining a license. However, most reputable businesses will purchase this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Detroit Pawnbroker Customers?

Detroit unfortunately does not provide a public database of active pawnbrokers in the city. We suggest contacting the Licensing and Permit Division for this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

Detroit Pawnbroker Bond