Would-Be Loan Broker Needs Answers
Question: I want to start a loan and personal-property brokerage. I looked in the telephone book and called the city clerk’s office but no one could give me any information on rules and licensing. Any help you can give will be appreciated.
--Phillip Rosenfield,
Sherman Oaks
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Answer: You must be licensed by the Department of Real Estate before you can become a business broker qualified to broker transactions involving real estate. A prerequisite to taking the state real estate examination is taking a three-unit course that is offered at most community colleges. Once you complete it, you can take the state’s real estate license exam, which is offered every few weeks for a fee. Contact the California Department of Real Estate in Sacramento for more information.
--John Bates, president,
National Business Brokers,
Lake Forest
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A: The regulations that will apply to you depend on exactly what kinds of loan transactions you are working on. If you are arranging business loans for companies, and are acting solely as a consultant, you probably do not need a broker’s license. If, however, you are collecting fees from lenders for finding loans, you may indeed need to obtain a broker’s license from the state Department of Corporations.
If you are buying and selling personal property, such as jewelry, gun collections or furniture and excluding real estate, you may or may not need a pawnbroker’s license. It depends on whether or not you are holding the property as collateral in exchange for repayment of the loan.
With a home-based business, you also need to check out the zoning of your home and the local rules governing home businesses to make sure you are not violating any regulations there. A great source of information and help for you may be the Valley Economic Development Center in Sherman Oaks. Along with offering counseling and classes on business development, their office includes a one-stop Permit Assistance Center, where entrepreneurs can get free advice and assistance in obtaining licenses, fictitious business name statements, environmental codes and local use permits. Call them at (818) 756-7572 for more information.
--Eugene Valdez, business
consultant, GYL Decauwer CPAs,
Rancho Cucamonga
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Q: I applied for a fictitious business name with the Los Angeles County registrar’s office and had it published for four weeks. Now a company is telling me that I need to research the business name I picked to make sure no one else is using it on the state, national and international level. They want to charge me $900. Can I save money and do this research myself? What happens if I find out that the name has already been used? Do I have to select another name and have it published all over again?
--Tom Abrajano, Harbor City
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A: What you’re talking about is a trademark search, and it is important because you don’t want to unknowingly infringe another company’s trademark and wind up getting sued. At the very least, a court would probably order you to change your business name after you’d gone to the time and expense of establishing your company and promoting it under that name.
The good news is that you can probably do a search yourself or hire a patent attorney or trademark search firm to do a search that will be adequate for your business for less than $900. You want to make sure other companies in your industry or closely related industries are not already using the name you have chosen.
Search the trademark office yourself online at https://www.uspto.gov. You’ll have to research the names that match your company’s and determine if they’re in the industry you’ve chosen.
Or hire a service to do the search for you. Companies such as Global Trademark Network Inc. (https://www.gtni.com) do searches for businesses and attorneys and typically charge around $250 for a basic search of the U.S. Patent and Trademark Office. For $300 to $450, they will also check all the U.S. secretary of state office databases and various private databases. Prices go up from there depending on how extensive you want the search to be. Some searches include Internet domain names as well as company names.
The extent of your search will depend on whether you’re primarily targeting customers locally, regionally, nationally or internationally.
--Jeffrey Graubart,
intellectualproperty attorney, Century City
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If you have a question about how to start or operate a small business, mail it to Karen E. Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016, or e-mail it to kklein6349@aol.com. Include your name, address and telephone number. The column is designed to answer questions of general interest. It should not be construed as legal advice.
