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Understanding CFLL in California

How Can You Get a CFLL license for Your California-based Lender Business?

Starting Jan. 2019, all California-based entities that take part in lending will need an operating permit. In other words, a license is a must-have if you want to keep your lender or lender broker businesses running in California next year.

These changes, spearheaded by the CFLL (California Finance Lenders Law) have been put in place to protect would-be borrowers from biased and misleading lending habits. Because the state’s CFLL license application procedure is lengthy and complicated, here’s everything you should know:

The New Requirements

It’s a pro step to learn what’s expected of your company before seeking a CFLL license plus any deadlines or associated fees.

On top of reinforcing the already existing CFLL, the new requirements listed under SB 1235, also adds to the list of groups who must get licenses to operate in the industry legally.

The new policies dictate that anyone involved in commercial financing within California must issue future borrowers clearly written statements with total fee amounts, per-month payment amounts, length of the contract, and APR info.

Products Listed Under Commercial Financing Include:

  • Commercial loans
  • Lines of credit of credit
  • Accounts receivable financing
  • Cash advances to business
  • Factoring amounting to $5,000 or more

The CFL demands disclosures from all of the above entities, which is to say lenders or lender broker companies can’t operate without acquiring a license.

Previously the CFL termed a finance lender as an individual who takes part in making commercial or consumer loans, thus excluding smaller lending firms and organizations. The revised definition now includes banks, insurance providers, real estate brokers, unlicensed lenders, and those who purchase accounts receivable.

Only physical locations for California-based lending or brokering business located outside the region or not serving residents of California can operate without licenses.

What Documents Do you need to Apply for CFLL License?

On top of filling out an application, which also needs two applicant legal representative signatures, you’ll need to consent to a criminal background check and provide a bunch of documents to ascertain that you’re operating an upright, stable company.

One essential requirement is a clean history, absent of any criminal records or sanctions by any supervisory agencies regarding fraud or deceit.

You must also submit a balance sheet over 90 days old, and have a net worth of at least $25,000. On top, you must provide a notarized surety bond to confirm the exact names of your business. Applications must include the exact business names, or you will be asked to write another.

The surety bond must feature power of attorney, applicant/s signature and the notary, and come attached with the power of attorney form. Plus, you’ll need to provide a business plan consistent with the kind of work you do as a lender. Your plan must thoroughly describe what you do to get a license.

Applicants must submit ten years of their residence and employment histories. All information must be complete and accurate. You must also provide a Questionnaire, Statement of Identity, and fingerprints. Any State of Identity or Questionnaire executed outside of California must be notarized.

Other relevant documents to submit are; approval for disclosure of your firm’s financial records, Fictitious Business Name, partnership agreement, an organization chart LLC statement, SSN and Federal Taxpayer ID Number.

You must also submit an original copy Certificate of Good Standing not more than two months old (you can request one from the state’s Entities Records), and it must show that you are authorized to do business in California. Note that the application and approval process for this certificate takes four to six weeks.


Applicants must sign and submit a statement in case of their absence and be represented by someone who holds a managerial role – most times, key stakeholders, like the president, CEO, or vice president. An official letter must be submitted for this arrangement.