Q: Do I need a Florida license for business-purpose hard money lending as a white label entity?
Do I need a hard money lender license in Florida for a business offering loans strictly for business purposes, such as real estate purchase, rehab, or fix and flips, under my brand name as a white label entity? My role would involve soliciting loan applications, scrutinizing them, and forwarding them to a third-party company that approves, denies, and services the loans. The third party will also handle all regulatory compliance and risk assessments. I will conduct all business activities in Florida, marketing the services over the internet, but I am considering using an LLC in Wyoming for this purpose if it offers a smoother regulatory path. My discussion with the Florida Department of Financial Regulations indicated no regulation of hard money lenders, but they advised seeking legal counsel for specifics. What are the licensing requirements to operate this enterprise in Florida?
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A:
For your specific business model offering strictly business-purpose loans for real estate investments, you likely don't need a mortgage lender license in Florida. Florida Statute 494.00115.3.d explicitly exempts individuals who "make only nonresidential mortgage loans and sell loans only to institutional investors" from licensing requirements. Since you're focusing exclusively on business-purpose loans for investment properties like fix and flips, you fall into this exemption category.
Your role as a white label entity who solicits applications and forwards them to a third party for approval and servicing provides another layer of protection. White label arrangements allow businesses to market a lender's financial products under their own branding while the actual lending company handles the underwriting, funding, and compliance responsibilities. This structure is common in the industry and helps you focus on building your brand without needing to develop complete financial infrastructure.
However, you must be extremely careful not to misrepresent business-purpose loans. Florida law makes it a felony to misrepresent a residential mortgage loan as a business-purpose loan. Document thoroughly that your loans are truly for business purposes by collecting statements from borrowers confirming the intended use of funds. Using a Wyoming LLC won't eliminate your obligation to follow Florida regulations since you'll be conducting business activities within Florida.
I recommend consulting with a business attorney who specializes in Florida lending regulations to review your specific business model and confirm these exemptions apply to you. The regulatory landscape can change, and having proper legal guidance will help ensure your business structure remains compliant.
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