What net worth must a finance lender or broker licensee maintain?

The correct answer, $25,000, represents the minimum net worth requirement that a finance lender or broker licensee in California must maintain. This requirement is in place to ensure that licensees have a sufficient financial foundation to engage in lending activities responsibly and sustainably.

A minimum net worth of $25,000 helps to instill confidence in the marketplace, as it indicates that the licensee has the financial capacity to cover operational costs, comply with regulatory standards, and manage potential risks inherent in lending practices. This requirement is part of the California Financial Code, which governs the operations of finance lenders and brokers to protect consumers and maintain the integrity of the industry.

Other amounts listed—$10,000, $50,000, and $100,000—do not correspond to the established minimum net worth requirement for a finance lender or broker license in California. Thus, they do not reflect the legal benchmarks set by the state's regulatory framework. Maintaining the correct net worth ensures that licensees can better withstand business fluctuations and fulfill their obligations to borrowers and the regulatory authority.