The Pawnbroker grants a cash loan in exchange for the deposit of collateral to secure the loan, along with interest and operating expenses.

The pawnbroking agent facilitates pawn transactions by granting an advance on items of collateral entrusted to him or her and pledging the collateral in his or her own name with a pawnbroker.

Anyone wishing to operate a pawnbroker’s business or act as a pawnbroker’s agent must obtain a license from the competent authority. The license may be subject to conditions to the extent necessary to protect the general public or the pledgor.

In the case of partnerships (e.g., OHG, KG), each managing partner is considered a business operator. In the case of legal entities (e.g., GmbH, AG), the license is granted to the legal entity.