# License Ready: How to Prepare for the Application Process > This session guides companies through the licensing application process, outlining essential stages from preparation to final submission. It explains how to organize internal teams and documentation, manage state-specific differences, and avoid common bottlenecks. The content is designed for businesses navigating multi-state licensing requirements. Recorded: 2026-08-17 | Runtime: 55 min ## Key takeaways - Most licensing applications begin with confirming the legal entity status and gathering documents like articles of formation, tax ID letters, and ownership charts. - States typically provide checklists of required items, but applicants should be aware that some requirements may arise that are not initially listed. - Maintaining consistent documentation and officer information across all states is important to prevent complications during the review process. - Deficiencies in an application often act as a study guide for missing information, and these should be addressed promptly within the state's specified deadlines. - Licensing requirements for financial products such as surety bonds and trust accounts vary significantly by state and license type. - Applicants should be prepared for a potentially lengthy process and are often encouraged to seek professional assessment regarding specific business activities and license types. ## Transcript Hi everyone. Good afternoon. Thanks for joining us today. I'm honored to be sitting here with these three beautiful ladies. kind of amazing. Together we bring 64 years of licensing experience. Not sure how that's possible since we're all so young, but that's the number here. for the next hour, we're going to walk through the key stages of the application process, the information and document most commonly requested, how to state guide, and common bottlenecks. Let me take a moment to introduce everyone. I'm Christy Barger. I am the chief revenue officer with Cornerstone. I've been here for 20 years. Denille Bickford to my right is our produ our director of production operations and has 17 years of experience. She's done she started kind of like I did which I think all of us did started as a specialist and kind of worked our way up through the ranks over the years. She now leads that department. Carly Pearson on the end has been here 14 years. Same thing. She started with us as a renewal team, renewal specialist, moved up to a team lead, and now she is the manager of the initial department. Last but not least, Dawn Graham in the middle here. She has been here 12 years. Same thing, started as a specialist, have kind of moved through the ranks, and now she trains, she's the training manager training all of our specialists. thanks ladies for being here. Thanks for having us. Okay, one more thing before we jump in. Due to the nature of the topics we'll be discussing today, we need to establish the following disclaimer. This information is not intended to be legal advice and may not be used as legal advice. Legal advice must be tailored to the specific circumstances of each case. Every effort has been made to asssure this information is up to date. It is not intended to be a full and exhaustive explanation of the law in any area. However, nor should it be used to replace the advice of your own legal counsel. You're invited to share questions in the chat as we go. if we have a moment, we'll grab those or we'll have some time at the end that we can answer any questions that the audience may have. Okay, let's get started. Great. Okay. All right. So, let's say I'm a company looking to obtain a license in a handful of states. I've determined that I need a Texas regulated lender license and a collection agency license in California and Nevada. I can just go file that now, right? There's not a whole lot of information I have to gather, right, Denal? Like what would be true before you ever touch an application for a company that you need to know, you need to get. What how does this process start off? So, it can be a pretty complicated process. I mean, step one is forming your entity. You have to choose the state that you want to form in. it could be the state where you're currently residing or it could be, you know, a different state. Many companies choose to incorporate in Delaware for tax reasons. But step one is forming your corporation or your LLC and getting a federal ID number in order to pay taxes. that is obviously the most important step. Then you're going to have to, you know, gather all of the documents you may need. many states require a financial statement. You're going to need to get bonded. you're going to need the information, personal information of all of your officers and owners. you know, quite a bit of information actually. Yeah, definitely. And Carly, yes. Since you're on the initial side, what are three things that you're going to ask for first that you're going to need? well I also am the onboarding specialist so I my job is to make sure that we have everything for you to get ready for all the licenses like all the general things that are needed. Neil already mentioned make sure your company is formed. so you'll need your articles of formation from that state. you'll actually need your tax ID letter that the IRS gives you saying here's your here's your EIN. and definitely ownership and management charts. Know who your who your managers are, who your officers are going to be. if it's a CEO, president, vice president, secretary, all of those. and ownership. that's a big one that we find. Make sure you know the entire ownership tree. if you're owned directly by individuals, all those percentages, we need all the percentages, to add up to 100%. If you're owned by a company or a holding company, at each level, you need to list the owner, 100% of all the owners at each level, all the way until you get to a publicly traded company or individuals. All right, great. That's a lot of information. So, I have a financial statement and one business plan. That's all you need for these three states, right? They're all that's going to work for all of them. It's part of the information that we need, but you may need a different business plan based on the regulated lender license over the collection or could the business plan be used? Yeah, usually it depends on the state's requirements. a general business plan. you want to have that in place so you can have it to provide to the states. each state has their own set of requirements. A lot of them for specific license types like all collection agencies, all lenders. they all have a basic like core items that they require. But each state has a checklist stating the exhaustive list of what needs to be provided on that business plan. So you may need to tweak it a little bit. You can have a general business plan and then if you need to have an addendum to it for a particular state, you can have a header that says Texas and then list those additional requirements on there. And that's kind of true with the financial statements as well that somewhat year in, someone audited, somewhat reviewed. Yep. And if you're a brand new startup company, typically just internal financials from your software like QuickBooks. some states will require it to be looked at by a CPA. won't need to be audited typically. if you're startup, usually it's called an initial statement of condition. if you're an existing company, depending on the license that you're getting, they may require audited, reviewed, compiled financials or some will just require initial or internal financials that are signed off by an officer. Perfect. All right. So, let's dive in a little bit more on the management chart. that's very important to the states. I know the NMLS has a definition of a control person. that's usually kind of what we look at as many states are on the NMLS now. That's kind of what we look at as a good guide. what if Texas doesn't need to know the full management chart as much as these other states? Can I tell one state something and another state something else? You can, but we don't recommend it. It's not a good idea. We like to stay consistent across the board. you want all of your officers to that are going to be listed on a license across the board. You don't want to try and submit one thing to one state and one thing to another state because what we have found is the states actually talk to each other sometimes. and it's happened where you get an email from a state saying, "Hey, you have this person listed in Nevada. why aren't they listed in Texas? and then you have to try and explain that and it's difficult to keep up with, you know, it's easier for the companies to be consistent across the board. That way, you know, if your president leaves and you have to hire a new president, you'll need to know what states you need to, you know, tell those states about the new person. So, it could get confusing. You don't want to inadvertently throw yourself under the bus. Let's talk for a second about bank accounts. I know a lot of the applications will say the word a trust account. do I need one trust account/bank account or do I need different accounts for different states? Tell me a little bit about that. that's going to be different for the states. There are you'll need an operating account. It's just your day-to-day business like business checking account. and then for the other states to require a trust account, this is going to be another account at your bank has to be listed as trust. and this is going to be where you collect money from somebody and then you're going to distribute it out to the clients. some states will require you to have a state specific account. other states don't care. It can be a general trust account where the funds are comingled from all states. the North Carolina collection license is one that requires a completely separate trust account. It has to be listed as North Carolina Trust. and there's other states that they just need the trust account number, bank name, and information. All right, let's talk a little bit about the officers and the ownership, the ones that have to submit those MU2s, I believe, on the NMLS, the control people. obviously they want date of birth, social, address, residential history, kind of the normal stuff you expect. tell us about some of the questions that are on there as that they have to answer. Never had a bankruptcy, right? Yep. one of the big questions is have you ever had a bankruptcy? have you, been like a control person, an employee at another company that has had any sort of lawsuit, civil action, regulatory action, or even if you have any sort of like derogatory credit, you have to report all of those things. and that's another thing to be consistent with. disclosure questions are going to be the same in the NMLS. outside of the NMLS, there are states that have their own platforms that they use for licensing. There's some that still use paper applications. and those disclosures are going to be very similar. word is slightly different. some of them will say in the past 10 years, have you ever or generally have you ever basically in the history of your life had a bankruptcy, foreclosure, had a license revoked? so you have to be prepared to answer those and also provide any sort of legal documentation to support that. if you've had a bankruptcy, you have to provide, the paperwork showing that it's been dismissed or completed. and you may have to provide a written statement as well to explain what happened and how you got there. Yeah, absolutely. Thank you. I believe like on the NMLS, if I'm an officer for another company, you can link all that stuff together, right? Yes. So, if you are in the NMLS already with company A and you're joining company B as well, either as an owner, officer, manager, you have your own unique NMLS identifier, and you link your you'll grant that company access and that company will be able to link you and will import all of your information into that company. you will have to add some additional information for the new company that you're a part of as well in your employment information. but other than that, it's all it's all there and you shouldn't have to provide it again. and that's as far as in the NMLS. Outside of the NMLS, you may still have to provide the same paperwork that you've provided before, another set of fingerprints, another credit report or background history. All right. All right. I feel like I'm really picking on you, Carly, but you're kind of you're the all knowing party. You're the star here. some states want to see Dunning letters or letters that they send out to debtors. as part of the application process, not all states have you do that. Correct. All right. So, but it's still very important that you know if there's other states, there could still be language or guidance on how to how to handle those letters that go out. So, just because it's not part of the license application. That's kind of a good thing to keep in mind that there's still other requirements out there. I mean, CFDB, FDCPA, all kinds of stuff out there that you need to pay attention to. Yeah. And those if it's statutory, it will more than likely be in the checklist telling you can refer to this statute for whichever state's law for what it needs to include. Okay, please remember if you have any questions, just shoot those through and we'll try to grab them here and answer it for you. Okay, well this sounds complicated. Story of our lives. thought it was going to be a little simpler just to kind of start a company and get going. So, let's say you're working for me and I tell you to go get these licenses. Okay, let's think about how we would plan that out. Are you going to do one at a time? Because you need all of them right now. So, are you going to do one at a time? Are you going to gather information for all of them? kind of what's your thought as we get started in phase one? phase one, you have to make sure that you are registered with a secretary of state for every state that you want to do business in. that's step one. Typically, you cannot get a license without this registration first. then what I would do is I would go to each state and pull up all the requirements for each license. most of them you can there's checklist available. there's other information frequently asked questions on the websites. and pull those applications and see I would pull those applications and see what they look like. See what's required. generally speaking, all the things that we've already mentioned, you're going to need for everything. You're going to need your articles of formation. if you're a corporation, you need your bylaws. If you're an LLC, you need, an operating agreement. So, you know, if you're a member manager, manager managed. need your stock information. you need that general business plan, your management chart, your ownership chart, and typically your financials as well. and you can ideally you can go through a group of states simultaneously. you do need to pay special attention to each one because they do each have special requirements that one state may have that another state may not. one state may require all of your officers and control people to have fingerprinting done, a federal background check, a credit report. another might just want their names and titles. you know, once you once you have the application filled out for the most part with the general information, then you can kind of look one by one and see, okay, what extra do I need for this? Do I need to provide a copy of my business plan? Do I need to provide a copy of communication that we send out to you know the people that we're we're dealing with? do we need something that says how much money is in our trust account? and those kinds of things. So it is it is feasible to work on multiple states at one time. you just have to make sure that you really are paying attention to what's what's what for each one. Yeah. Awesome. So, there can be benefits to filing a group of states together, right? Like the NMLS because you're entering all the same information specifically sending what's different. does that affect the fees at all? I know the state filing fee probably. So, if you have multiple states in the NMLS that you want to file for, generally speaking, it's great if you have everything ready to go to file. So, if you have three states to file in the NMLS, they all require background checks, they all require credit reports, it's best to go ahead and file those together because then you will pay one background check fee per person, one credit report fee per person. outside of that, if you have like you want to get the Nevada, Nevada is very extensive. it requires you to have a qualified individual or a manager. There's a whole separate application for that. That has to be prepared and approved. You have to submit that application with a slew of other things. So there might be a few things that you don't have for that, but you might have like an Oregon license that you want to get you have everything ready. so if you have to submit those separate, you're going to have to go ahead and if you can't wait, you want to go ahead submit the one. You'll have to pay the background and credit report fee for those. And then when you're ready for Nevada, then submit that. you will have to pay the credit report and background check fee for those also. Again, the good thing is with the credit report, if you submit it within 30 days, you can usually still use the same credit report. It doesn't have to pull another credit report for the individuals. I'll give you a little bit of break. So timing apparently it sounds like you have to use things in a certain period of time and they can't be old. Is that common across the different requirements? It is. And that's common for both initial licensing and renewals. I know we're kind of talking about what's needed to get ready. many states want a letter of good standing from either the state that you're applying in. Let's say you're applying for a Texas license. They may want a copy of your Texas good standing to show that you are active with the Texas Secretary of State. many times on the renewals, which Don knows well, you're going to need to get that good standing every single year. They want it within 30 days, 60 days, 90 days, whatever the case may be. and some states want a good standing from your home state. You know, if you incorporated in Delaware, let's say, but you're getting a license in Nevada, may want to see a copy of your home state letter of good standing dated within 30 days. yeah, they just want to make sure that you're in good standing everywhere that you're supposed to be before they issue you a license. Oh, absolutely. So, the applica, the checklist that we can that anyone can access to do the license, it has everything on there. There's never any surprises or anything after that, right? Funny you should ask. We've we've come across several surprises in our 64 years of experience here. one of the things that we found is Rhode Island is a state that if someone has not lived within the United States for the past 10 years that they do have to get their fingerprints done provide a credit report, but they also have to provide an external third-party background and credit report that goes back 10 years. it's not on the checklist. We've looked. but it comes back we've we've had several come back with that requirement and we say, "Well, it's not on the checklist." And like, "Yeah, but we need it, so we have to provide it." let's see, what's another one? some with the financials there they might require like a flow of funds structure that's not on the checklist. and we have a state that we found so in your ownership some companies are owned at a higher level by a trust. and then there's trustees who are not ne typically not control people of the company. They don't have control of the day-to-day activity. occasionally they do. but a lot of times they do not. we have a state that actually considers the trustees control people or even owners or indirect owners and they have had to provide the all the stuff on the MU2 for the NMLS, 10 years of residential history, 10 years of employment history, social security number, date of birth, DNA sample, you know, whatever. Just kidding on the DNA sample, right? Just kidding. Almost to that level. It's close. We were getting there. Don, you attended an MLS conference last year and you specifically asked Massachusetts about things not on the checklist, right? Yeah. I think the question that was posed was, "What percentage of applications get approved the first time through?" and the answer that the regulator surprised the entire room when he said zero. 0% of applications that are submitted for that type of license are approved the first time through. So for me that is one of the things to be mindful of. You can do everything as asked of you from the checklist like Carly was pointed out and still receive a deficiency on that application. So I like to try to caution folks when going into this. Don't get in an uproar. If you get a deficiency, kind of treat it like if you were back in school and you had a well, we used to call it a cheat sheet, but we'll call it a study guide. Okay? We'll try to use a deficiency as a study guide to say, "This is exactly what I need to do in order to get from this point to approval." Okay, that sounds like even if you do you work really hard, there's still you're not done until you're done. So, you get that life. done. You're not done. That's the best part to look at. Done. Done. Well, let's let's talk about for just a moment then about deficiencies. there may be a deficiency because it wasn't on the checklist. there could be a deficiency because I forgot they wanted year in financials and mine were from the year prior and mine were two years old. when deficiencies happen, you get notified. Then what do you do? you have as long as you want to respond to them? You want to respond? Sure. The answer to that is no. Typically, what typically what happens is the state is going to set the deadline for when this deficiency must be addressed. And you really have just that amount of time to get that item cleared up. One of the other deficiencies that I think is very common that people don't realize is your name is James, but you go by Jim. And so when you filled out the application, you put in Jim, but you have to give the state a copy of your driver's license. those names don't match, that application is going to get rejected. So, there are things like that happen all the time. But yeah, the biggest takeaway to your question there, Christie, is no, the clock starts ticking when that deficiency gets issued. The states are only going to give you so much time to come in and clear that matter before they may in fact abandon the application and make you start from scratch. And it doesn't mean you can't request an extension. I've seen issues where officers are traveling and they're going to be gone. Some people take a long they'll take a whole month off. I don't know that life would love to know that. I have dealt with somebody that he has a boat and he takes the boat out for like 30 to 45 days in the summer. so he can't be reached. So occasionally if there's something that has to do with a specific individual or if it's something that specific individual is the only one that can provide it, you can ask the state for an extension. Don't wait until the day before. Like if you know like as soon as you know you're not going to hit that deadline. email the regulator who issued the deficiency, be very nice. Usually they respond very well to being nice. you know it's like hey this is the situation is there any way that you can grant us an additional x amount of days I wouldn't leave it open-ended I have found that if you ask for a specific amount of days they're more than likely going to grant that as opposed to say hey can we have some additional time and they give you seven days so nice well as you're gathering stuff then obviously if you got to chase down people in boats [snorts] you know or out the country. So, if I'm out of the if I'm a non- US citizen and I'm out of the country, they still have to go through the background screening of the fingerprinting. They just there's a version of it out of the US. Yes. So, it and it depends on the state. in the for the states that are in the NMLS, they use a company called Field Print that does the fingerprinting. You can't just go to any like UPS store and get your fingerprints done. It has to be done through field print. and you can't get the fingerprints done for this and for any of the states in the NMLS until you submit the application. you submit the application within that the background check is paid for. And that's just the background checks paid for. then you can send then the you should be I believe you get an email stating that fingerprints need to be done. I'm not 100% sure. Maybe not because it is listed on the checklist for outofcountry individuals u the steps they need to go through contact field print say hey I'm out of the country I need to get fingerprint cards you provide all the information they look up and connect it with your NMLS account they see that it's been paid for and they mail you your fingerprint cards then you have to go typically I guess like a local police station out of country like wherever you are get fingerprints done, make sure they're done properly. and then you have to mail them back to Fieldprint. Once Fieldprint receives them, they'll scan them into the system and process them. you do have to pay for the fingerprints. This is everybody out of the country and in country. if you're if you're a US citizen, you've been in the US for 10 the past 10 years. when you get your fingerprints done, they're digital. but you do still have to go, you do still have to pay the fee to get those done. depends on where you go. for folks that are out of the country, we have seen it come back where fingerprints come back, they're rejected, because they weren't rolled, they were smudged, and then the unfortunate circumstance sometimes you have to request an additional set of fingerprint cards. and then if those get sent, submitted again, they process, you're all good. Perfect. occasionally they will get rejected again. and then they will do, is it a name check that they do? I think they do like an FBI name check. if it results in the FBI name check, if you apply for another license further down the road, you may be required to go through the entire process again. Yes. Even if it was only a few months ago. Awesome. Well, when we started here in our childhood days, back in the day, everything was paper. It was wet signatures. It was notaries. How have we kind of Do we still have some that are wet signature? Are we all digital now? I know not all states are on the NMLS, but do they have portals? Like, how does all that work? I think it's just like everything else. It's going to vary. like we have I just this is no lie just got a rejection of a form that was submitted using digital print and the state came back and said that wet signature is required even if the form is going to be uploaded into the portal. Yes, that's what they said. So just be aware it is going to vary from state to state in terms of what they will and won't accept as it relates to this whole thing excuse me signature process. Many states many have moved towards accepting electronic signature and I think we can thank COVID for that because so much was done remotely during that time period. However, not all have jumped on board with the electronic signature process. So, it's just going to vary from state to state and oftentimes license to license. And I will say in the past 20 years, a lot of states have moved to, you know, not necessarily a digital signature, but they've moved to an online application. Correct. especially the Secretary of State, those certificate of authority filings, almost all of those are now filed online when, you know, 20 years ago almost all were filed on paper. so the online filings have definitely there's, you know, a state or two that moves online every year. Yeah. And some of them have some states have their own specific portal that they use. Some are venturing over to the NMLS and some are just old school paper. Yeah. And then some are a combination of the two. They're going to have you fill out the forms and then you are going to upload those forms into their portal. So, it's just pack your patience. I would say when starting this process, especially if you're going to be doing multiple states at one time, just know that yes, it is going to vary. Just as Illinois is different from Georgia and climate is going to also be different in terms of licensing and procedure. Absolutely. one thing that I that I know is part of application process that we haven't really touched on yet is the shy bonds. tell us about that Denille. Is it one bond for all states? Is it different bonds? What's that deal? It is a different bond for each state and each state has its own requirements. Some states just may say we need a $5,000 shy bond. some states may look at your financial statement and base the coverage on your financials. The better your financials are, the lower bond amount you have to have. some states base it on the amount of collections. if it's a collection license you're needing a bond for. Some states, you know, want to see how much money you've collected in that state in the previous year. and they'll base the bond on, you know, the money you've collected. But yeah, not one bond for all states. not every state requires a bond. Most do. and it just varies for those different reasons. Yeah. And the different bonds for different states and for each different license type as well. Good point. you can't get you know just a Texas bond to do collections and a Texas AAD and a regulated lender. You can't get one bond to cover everything. You are going to have to have a separate bond for everything you do. Barb something you said there. So there's an initial bond obviously because you have to submit a new application. if it's based on collections when you get to renewals what do you do? So, in a lot of cases, there's going to be a bond calculation worksheet where you're going to have to go in and report to the state what that activity has been for the previous year. And that will determine if your bond amount is still sufficient or if you're going to have to get a writer from your shity company to increase the amount that is going to be the coverage that you're going to need for your bond. So, it just it can vary and it can change. And one of the other things is not just the amount of collections. Some of them are based on how many employees do you have at your company. Like, you know, that can be a determining factor for what this bond amount is going to have to be. It's a lot of variance in this. The layers just keep going. Yeah. And with bonds too, you know, when you're starting up the company, you're starting to get licensed, you know, we recommend you have the financials. You, like Denille mentioned, you are going to need to provide your financials to your to your bond agent. and if you don't have, like if you're a brand new startup, they may ask you to complete different forms, provide additional information. If the company is owned by a parent company, they may ask, you know, information of the parent company, to make sure that they can insure you. And the SH companies do a yearly review of every account they hold. They want every year a set of new financials to make sure that the bond amount they issued last year is sufficient for this year based on your financials. you know many companies have a rough year. Their financials are not great this year. So the shy company will look at that and they may adjust the bond requirement require you to carry a higher bond you know this year than they did last year. So let's talk about we've got all this together now. We think we've got all everything that the state's going to want. we submit it. It's going to take a couple weeks, right? Maybe, if it's Iowa, I don't know. it depends. we do our best to make sure, you know, you want to make sure you have everything, every piece of information. Check all the boxes on the checklist. Don't be like, well, we'll see if we can pass without that. Make sure you have everything. have the check cut for the right amount or if you're submitting online, make sure you have the right credit card. Animalist does not accept American Express, by the way. so if you have only have American Express business card, you may need a different way to pay. you know, and once it's submitted to the state, you are at the state's mercy. some states may take, we've seen them take 30 days, others we have seen upwards of one year and longer. So, the only thing that you can really do is, you know, give it a little bit of time. Like Don said, pack your patience. if you don't hear anything within, you know, 30 days, you can reach out to the regulator to say, "Hey, I just want to check on this." But if you're in the NMLS, you can go to your NMLS account and you can check and see if there's deficiencies. whoever the admin is on the NMLS account will get deficiency emails. Anytime anything is done in the NMLS, they will get a notification that something's been added or something's going on. and then, you know, you can keep track that way. Okay. So, we know it's going to take the states a long time, various states, various lengths, various reasons. What happens if the an application is out there, they come back and say you're not 100% sure everything's there, but you want to get in there and get in line and you want to, you know, get there. What does how did the states look at? Well, okay, so you did need a signature from this guy and now he's on the boat for 30 days. Is it a good idea to submit an application that's incomplete and hope there's no issues or I don't recommend it. If you know if you willingly submit something that is not complete, I got nothing for you. I really don't. you really need to submit a full and complete application with every piece of information that they ask for. Some states are going to ask for personal financials from the officers. and they need to be willing to provide this information. if they're not, then the state is going to come back and they're going to ding you with deficiencies. That is going to prolong how long it takes you to get that license approved. So, if you're if you're missing boat guys signatures just cuz you wanted to get in line as soon as you get up, you know, think like you get up to the window and you're like, you know, you're not quite ready, they're sending you to the back of the line. So, you don't get priority treatment when you don't have everything ready and it irritates the states. Yes, the states don't want to have to revisit an application or extra communication with the client for things that are missing, right? Especially if it's something that is on that checklist, something that is very detailed. there's some states that have very specific things that they want on their financials. and you need to make sure if it's your CPA preparing your financials that you send them that list. say, "Hey, this has to be on here." because if it's not, those specific states are going to come back because they analyze everything on the application and within those financials. so I' I've had I've had, you know, a state go back and forth with a client for months and months and then reject actually reject the application because they could not provide exact like even just one piece of information on the financials was missing that they couldn't provide and the application got rejected. We've got a couple of questions from the audience. again, we're not attorneys. This is not legal advice. This is a statement. knowing what license you need takes some digging on the front end. Obviously, you want to look at the state statutes. You want to look at the applications. a lot of times with these specialty licenses, you should definitely get an attorney to do an assessment to make sure that you're applying for the right thing. if you call the state, you're probably you're going to get one of two things. You're going to get an answer, but that person may not be there tomorrow. So if who knows if that answer was right or you're going to get we can't give legal advice seek see seek counsel you know the different license types that's again different definitely a legal assessment different activities one thing I always say just because you look at your activities on the front end we all change business models throughout the year we'll try something or want to do something that's a trigger to look at more licensing sometimes a different license is needed, obviously not always. if we're talking about the collection space, there's first party versus third party activity. Some states are very specific and say first party activities included, like California for example. other states you could kind of read it that way or you kind of could argue it the other way. So, you know, if there's a doubt as to whether you need a license or not, please seek counsel and an attorney and have them give you guidance on that. so you're getting the right licenses to cover what you're doing. And make sure that if you are going to be, you know, that you're starting up with these activities, but you are going to be adding you know, ABC activities that you let that attorney know as well, so they can help really guide you the right way. because you may need to go ahead and get another an additional license to cover you for when you start that because if some people want to okay well we'll start with these handful of licenses and then once these get approved then we will going to start doing you know this activity too and then we're going to get these licenses. So, you want to make sure that you're covered across the board. and that your the states aren't going to backtrack and say, "Hey, well, your business plan says this, but you applied for this. You know, you need this license also." because that'll sneak up on you as well. Okay. So my notes say we're not only looking at state to state, we're looking at application to application. We're looking at state to state. It's not straightforward. No, no, there's no one clear path. So, you know, it's straight as a course. Oh, I love that. I think we're gonna have some good quotes coming out of this here. Okay. let's talk about change of control. She just for [clears throat] a minute. So, I've submitted my applications. Okay. I've decided I now want to hire Denal to be my CFO. My application is still pending at the state. I don't have to let them know about Denal, right? You definitely do. If she if she's already started working, if she's getting ready to start working, you need to let the states know hey, we've hired somebody else. And then a lot of states will let you just submit the additional information while the application is pending. others it could prolong the application process. others it's pretty streamlined within it. but yeah, you definitely need to keep the state in the no for all your changes. officers, owners, all the things. you can't just come up on the renewal and be like, "Oh yeah, that person's not here anymore." or you know, these two people are gone, but we have these three new people. that doesn't really keep you in good graces with the states. That's a perfect statement to lead to what I was going to ask Miss Dawn. Okay. Obviously, we're licensed, changes occur. Do I tell them what it happens? Are can you fix it at renewal time for me? Okay. so most states have a statutory requirement that you update and they have the most re excuse me, the most accurate information within 30 days of occurrence. So if you have someone, some states, in fact, I think Rhode Island wants you to give them a n No, they got a 90 days. It's amazing. Free not. Oh, the free notification. Correct. That's right. Correct. You know, they want you to let them know about things 90 days before. And that's not always, you know, something that you can do. But and to answer your question, Christie, yeah, you have to let the states know within 30 days of occurrence. If your address is changing, what we do first is we're going to send out a notification to let the states know this is happening. And then as of 30 days of that effective date, we have to get all of those change forms into the states. So, yep. And there are some states that are very strict for specific changes u change in ownership or you know for the collection space the collection manager and the MLS could be a qualifying individual if you don't if they have the 30 days and you do not notify them within 30 days and make the change within 30 days your license is gone and they don't care and there are some states because you brought up the qualifying individual just brought to mind the whole management manager position. There are some states that if you do not have an active manager license into place, you are no longer allowed to collect in that state. It deems your collection agency license kind of invalid until you get someone in that position. So, it is vital that you are keeping those material changes bringing it to the state's awareness and submitting whatever forms, document, fees or doing the actual change online, you have to do it within the parameters of those deadlines. Yep. And some of the mortgage licenses too, if you don't have if your MLO leaves, you got to have a new one. they require an MLO to be there. you know with qualifying individuals. There's some that they'll they'll give you a grace period like okay well you have this amount of time to you know to fix it but others they will not grant additional time. has to be done or you have to you may get a cease and desist order from the state and you don't want one of those because then if you get a cease and desist order then you have to report that to all of the states because that is part of your company disclosure questions if you've had a license revoked had any regulatory action taken against you that is part of it. Yeah. Please note that the states are all individual, but what happens and impacts your company is going to happen, excuse me, is going to have an impact on all of your licensing. So, you want to make sure you are staying in compliance everywhere that you've secured either registration or license. Yeah. And again, states talk, especially with negative stuff. States also may issue a fine. You know, let's say your collection manager leaves today and you find a replacement tomorrow. you know, there was no time lost between where you didn't have a manager, but you didn't notify the state within the 30 days. Let's say you notify them in 6 months. They may ask you for how much money you've collected from that state in the last 6 months and ask for, you know, 10% a certain percentage of the money you've collected from that state and that will be what they're finding you for not notifying the states in a timely manner. We've seen very large fines come from a few states. Mhm. So, what we're saying, it's very important to make sure the states are all consistent, that they all know the same ownership officers, and that when it changes or you move or any disruption from your normal day, you need to do something. Yeah. And from what you said with the moving an address change in some states that requires you to completely rellic as of the date you move your license is no longer valid because that license is attached to the location the address and not your company which is weird but that's how they function. I just want to jump in there on that address change things. Please be advised that if you were once in sweet 470 and you move to sweet 475 that constitutes an address change. Y so please know they're like, "Well, I'm in the same building." Absolutely. But you were not in that suite. And that does in fact have to be reported to the states as an address change. Yeah. Or you change floors in the same building. Same thing. Okay. Another question from the audience. I have a license was due to renew in December. Oops, I forgot. Can I renew it in January, February, or do I have to relic? Depends on the state. Correct. There are some states that will allow you a reinstatement period and they'll let you let you know what that is. But that is not every state. Some states are just like, "Oh, you didn't renew. That means you don't have a current license, which means you're going to have to now relic in our state." Okay, we've talked about a lot of stuff today. I think it's safe to say licensing is confusing, but yet it's very important. and you want to make sure that you're doing the right thing. Most agencies obviously are doing that and the states know that. So going to them if there is issues isn't automatically a really bad thing. It's worse if you try to hide things. so notifying of changes as they come. Make sure that's done. all right. So let's take a few minutes and go across here. Walk away. topic. What is your what did you learn today or what did you learn what did you what did you talk about today that you want people to remember? you know mine is good licensing outcomes come from clear ownership, consistent documentation and early alignment of your business model and continued alignment of your business model and checking it. Yep. I would say make sure you have all your tees crossed, all your eyes dotted. read the checklists. Reading is fundamental. most states have it out there exactly what you need to provide. obviously there's we've told you there's some surprises now and then, but as long as you go down the checklist and you hit all those, you know, then you know that you're you're on the right path. Yeah, details matter. You know, I kind of think about it like licensing as a allowing a guest into your home. It's, you know, you're going to have your own set of rules and regulations. Some people are fine with you walking in with your shoes. Other ones want you in your socks. So, it's just you have to meet the expectation of that licensing authority. And yes, exceptions can be made, but don't expect the exception. You know, go ahead and adhere to what it is that they are asking you to provide. be patient and realistic in your expectations of outcomes. We know that licensing is key because this is how we're going to make money, right? But before you can get to that point, you have to in fact get the approval that you are seeking. Give the states what they're asking for in the manner they are asking for it in the time that they are asking for it and then pack your patience and wait for them to give you the approval. Usually the outcomes are better, I would say, more on the positive than on the negative. If in fact you go ahead and do what Carly was suggesting and just go down that checklist, make sure you're adhering to what it is they're asking you for. Yeah. And if you reach out to the states, be sweet. Just be sweet. Yeah. Like, hey, I just want to see if you've had a chance to check on this, you know, check the status of this application. And if they don't respond, you know, whatever. If they do, you know, it's always a please and thank you. Yeah, I was going to say we always use the term states. Reach out to the states. Reach out to the states. Understand that these states you're reaching out to are actually people who are working in that governing office. And so treat them with kindness. Treat them the way you would want to. We understand there's always going to be that passion and that sense of urgency because you're trying to get to that license. But most of us will respond better to someone who approaches us in kindness than we would respond to somebody who approaches us with arrogance and or I can't come up with the word I'm thinking of. Yeah. Persistence and tempered persistence when you say you know tempered persistence will get you further than you know the sense of demand that you have that this gets processed. Now, I would say licensing is a complicated process as we have just discussed. If you are wanting to open a financial services business, you're going to need licensing. You're going to need to understand all the requirements. Do your research. Know that you're in for a long haul before you can actually start your business. make sure you research the requirements, understand what's needed, have your financials in check, and as we keep saying, be patient. It's it's going to take a long time. So, you know, do your research before you, you know, start hiring clients to do business for them. right. You know, get yourself ready. Give yourself a good year before you can actually start doing business. Yeah. And on that note, don't make promises to potential clients that you're not sure you can keep. That's a good one. Yep. and know that in the financial space there's attorneys out there, there's vendors, there's professionals that do the licensing all the time and know what's going on. so utilize those services that are there. They're there for a reason and run your company and keep it growing. Yeah, absolutely. All right, guys. Well, if I missed any questions in the in the chat, please feel free to reach out to any of us. or I can go back and just make sure I call all of them. I think I did, but you never know. So, feel free to reach out if you have any specific questions and we'll be happy to happy talk to you. Thanks, ladies. I appreciate all of you. Thanks, Christie. This is great. All right. Hope we helped. I think so. Everybody have a great afternoon and we'll see you soon. Canonical HTML: https://cornerstonelicensing.com/webinars/license-ready-how-to-prepare-for-the-application-process --- ## How to cite this page Cite as: "License Ready: How to Prepare for the Application Process." 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