A pawnbroker offers short-term loans to customers who need cash fast and have collateral with which to secure the loan. Each state has different guidelines concerning the operation of pawnshops and the licensing of pawnbrokers. In Tennessee, pawnbrokers are regulated under the Pawnbrokers Act of 1988. Residents interested in opening a pawnshop must adhere to the specific guidelines for licensing as detailed in Title 45, Chapter 6 of the Tennessee Annotated Code.

Things You Will Need
  • Business license

  • CPA statement of proposed assets

  • Statement of moral character

  • Filing fee

  • Insurance

Obtain a Tennessee business license if you have not done so. An application for a business tax license can be filed with the clerk of court's office in the county in which you plan to do business. In addition to a business license, you will also need to contact the Tennessee Department of Revenue and the Internal Revenue Service to register for state and federal tax identification numbers.

Apply for a federal firearms license if you plan to buy or sell firearms. Federal firearms licenses are issued by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Along with your license application, you must submit a recent photograph, a fingerprint card, a signed certification of compliance and an application fee of $200.

Contact a certified public accountant (CPA) to obtain an unaudited statement regarding business assets. Tennessee law requires individuals applying for a pawnbroker's license to have a minimum of $75,000 in available financial resources to be used specifically for business purposes. This statement must be signed and notarized.

Obtain a statement of moral character from the county law enforcement agency where you plan to do business. This statement must be printed on the agency's letterhead and certify that you have no prior felony convictions and are of strong moral character. You must also provide a separate notarized declaration attesting to the fact that you have not been convicted of a felony in the past 10 years and are qualified under the law to operate as a pawnbroker.

Purchase a catastrophic coverage insurance policy through an insurance agent licensed to do business in Tennessee. You must purchase a policy sufficient to cover the cost of your business inventory or the aggregate total of all pledged pawn stubs in the event of fire or other catastrophe. A copy of the policy must be filed with the county clerk's office.

Complete the petition for pawnbroker's license and submit it to the county clerk's office. When you submit your application, you must provide all supporting documentation along with the appropriate filing fee. As of 2011, the filing fee for a pawnbroker license was $50.


Consider joining the National Pawnbrokers Association to connect with other professional pawnbrokers and stay abreast of industry trends and news.

Check your application carefully prior to submitting it as incorrect or omitted information can cause its processing to be delayed.


Avoid purchasing or selling any merchandise you suspect is stolen, particularly firearms.