Sales Finance Company License
Sales finance companies specialize in making loans to customers of a particular retailer or manufacturer. Learn how to obtain and maintain a sales finance company license.
Sales finance companies primarily buy installment credit contracts secured by automobiles or other consumer goods from retailers. Since they deal initially with the merchants who sell the goods rather than with the consumers, they have been free from many of the legal limitations and restrictions that have been applied to direct lenders. Examples of sales finance companies include:
- Brokerage firms
- Central banks
- Credit unions
- Insurance companies
- Internet banks
- Investment banks
- Investment companies
- Mortgage companies
- Retail and commercial banks
- Savings and loan associations
While sales finance companies focus their attention on purchasing consumer installment credit contracts, there are several other activities they engage in. All of the major companies finance the inventories of dealers, who customarily sell the companies their consumer credit contracts. Some companies provide different types of financial aid to retailers. Some engage in extensive insurance operations of nearly all sorts. Some engage in a wide range of business financing. Others have factoring or manufacturing subsidiaries.
How to Apply for a Sales Finance Company License
Sales finance company licensing is required for finance companies involved in almost every aspect of the retail installment sales contract life cycle. Whether your company is a retail installment seller, a sales finance company that purchases retail installment sales contracts from retail installment sellers, or a sales finance company that buys retail installment sales contracts from sales finance company holders, your company will need sales finance licenses in most states where it does business.
If you plan to own or operate a sales finance company, you may need to obtain two types of licensure: an individual license and a branch license. Each application will have different requirements and fees. Before beginning the application process, you should start by reviewing your state's applicable laws and regulations applicable to sales finance companies. Consult your attorney or financial consultant if you have questions about your qualifications or meeting any requirements.
You will likely need a detailed business plan, financial statements, and a background check. You will also need to appoint a registered agent to receive notice of lawsuits and other legal or government notices. If you're uncertain about your business' needs, the finance license experts from Harbor Compliance can help.
Maintenance and Renewal
Once your application is approved and you’re licensed to run your business, you need to ensure you stay on top of renewal requirements. While requirements vary, most licensing must be renewed on an annual or biennial basis. Applicable fees must also be paid. Failing to renew on time could result in fines and penalties.
Keeping on track with your business' license renewals can be complicated, especially as a growing company. At Harbor Compliance, our managed annual reporting and registered agent services ensure accurate due date tracking and on-time filing. This way, your business will continue to be compliant with state and local requirements, and you will have the time you need to continue working and expanding your clientele.
Meeting the sales finance company license requirements is not always an easy process. Fortunately, Harbor Compliance License Manager helps finance professionals maintain their licenses by automating repetitive tasks like tracking renewals. Through License Manager, you can also access reference data for the states in which you operate, reducing the time you need to spend researching state requirements. Contact our licensing experts today to learn more.
State Licensing Requirements
To properly apply for and maintain a license, it is imperative to stay on top of your requirements. Click on the link below to view licensing information in your state.
Independent Insurance Agents and Brokers of America (Big “I”)
Advocacy group of independent insurance brokers and agents.
National Association of Insurance and Financial Advisors (NAIFA)
Professional association that advocates for favorable regulatory conditions for insurance agents and financial advisors.
National Association of Insurance Companies (NAIC)
A standard setting and regulatory support organization that is governed by state insurance regulators.
National Association of Professional Insurance Agents (PIA)
Professional association that provides education and advocacy for insurance agents throughout the United States.
National Insurance Producer Registry (NIPR)
An affiliate of the NAIC that provides streamlined and uniform producer licensing processes.