Can a pawn shop or check-cashing business get an SBA loan?
Short answer
Possibly. A pawn shop is eligible if more than 50% of prior-year revenue is from merchandise sales rather than loan interest. A check casher is eligible if more than 50% of revenue is from cashing checks. Source: SOP 50 10 8.1, Sec. A, Ch. 1, Para. E.2.
Yes, if revenue comes mainly from the non-lending side. 13 CFR § 120.110(b) bars businesses primarily engaged in lending but says pawn shops may qualify in some circumstances. SOP 50 10 8.1, Sec. A, Ch. 1, Para. E.2 sets the numbers.
Pawn shops
A pawn shop is eligible if more than 50% of its prior-year revenue is from merchandise sales rather than interest on loans.
Check-cashing businesses
A check-cashing business is eligible if it receives more than 50% of its revenue from the service of cashing checks. Other lending income does not count toward that share.
What the numbers must show
Use your prior-year income statement and separate each revenue line. Split pawn interest from retail sales. Split check-cashing fees from other income.
Form 1919, question 7, asks whether any revenue comes from lending activities. A yes requires a separate attachment with details.
What still applies
Every other core test applies, including size, credit elsewhere and the citizenship rule. These SOP tests are thresholds for eligibility only. Each lender still decides whether to make the loan, and lender policies vary.
Ask lending partners about your loan
Tell us the amount you need and what it is for. We refer you to lenders that may fund businesses like yours, and it costs you nothing.
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