Financing for Gold Buyers, Coin Dealers and Precious Metals Dealers
By MercFinancial · Published 2026-10-21
Gold buyers, coin dealers and bullion dealers are financed by asset-based lenders against inventory marked to spot, by refiner advances and by equipment lenders, with hedging and a written AML program expected before any line is sized.
Financing for a gold buyer, coin dealer or bullion dealer, and for the pawn shop that buys gold over the counter, comes mainly from asset-based lenders and specialty finance companies that lend against metal inventory marked to spot, from refiners that advance against lots before settlement, from commercial real estate and equipment lenders on the premises and the vault, and from unsecured lenders priced on the owner's credit. Most banks and several large online lenders decline the trade on policy, because the inventory is a commodity, the business runs on cash, and the Bank Secrecy Act treats a dealer in precious metals as an anti-money-laundering obligation.
This guide explains why precious metals dealers are hard to fund, how lenders value bullion, numismatic coins, scrap and finished jewelry differently, what they expect you to do about price risk, the products that fit, the documents an underwriter asks for, and the mistakes that get dealer files declined. It closes with how MercFinancial places a dealer's request.
- Precious metals dealers have anti-money-laundering program obligations under the Bank Secrecy Act once purchases and sales cross the rule's volume threshold, and lenders ask for the written program.
- Lenders value a precious metals dealer's inventory by class: bullion marked to spot is the most lendable, while numismatic coins and finished jewelry are discounted heavily.
- Gold dealers appear on the restricted-industry lists of several large online lenders, so automated products decline a precious metals dealer before anyone reads the file.
- A metal-backed line usually requires the precious metals dealer to hedge price exposure or accept a lower advance rate against unhedged inventory.
A lender will finance gold at spot all day, provided the dealer can prove it is not also betting on the price.
Why gold buyers and coin dealers are hard to fund
A precious metals dealer hands a credit officer four objections at once. The business is cash intensive on both sides of the counter, because the public sells scrap for cash and buys coins with it. The Bank Secrecy Act makes dealers in precious metals, stones and jewels responsible for an anti-money-laundering program once their volume crosses the rule's threshold, and cash received over $10,000 in one transaction or related transactions must be reported on Form 8300. Its inventory is a commodity whose value moves every trading day. And several large online lenders list gold dealers among restricted industries, so the fast products are closed before underwriting starts.
State law adds registration and hold periods. Many states require buyers of precious metals from the public to register, keep transaction records, report purchases to law enforcement and hold goods for a set period before resale. Texas, for example, registers crafted precious metal dealers under its Occupations Code. None of this makes the business unfundable. It means the funding sources that say yes already contemplate a dealer in their policy, which is the premise of this guide and of the series on pawn and precious metals business funding.
Inventory that is also a commodity: how lenders treat each class
Lenders do not see one inventory number. They see four kinds of metal with different liquidity, and they advance against each differently.
| Inventory class | How a lender values it | What the lender usually requires |
|---|---|---|
| Bullion bars and sovereign coins | Spot less a haircut, the most lendable class | Regular mark to spot, a hedge or a lower advance |
| Scrap gold and silver awaiting refining | Assayed weight and purity at spot, less refining cost | Lot-level records and refiner settlement history |
| Numismatic and graded coins | Deep discount to dealer-to-dealer bid, never retail | Third-party grading and concentration caps per coin |
| Finished jewelry | Melt value plus a small allowance | Cost records, slow stock written down |
The hedging expectation follows from the first row. A lender advancing against bullion at spot is exposed to the price falling before the metal sells, so it asks how the dealer manages that: forward sales to a refiner or wholesaler, futures or options through a commodities account, a pool account with a refiner, or a strict practice of selling what is bought within days. A dealer who holds unhedged inventory on a view of the gold price is a trader, and lenders price a trader differently, usually by cutting the advance until the open position is small enough to absorb. Coin dealers with mostly numismatic stock face a different problem. There is no spot price for a graded rarity, so the advance is low and the lender leans on turns and margin instead.
The products that fit a precious metals dealer
- Asset-based revolving line. From an asset-based lender or specialty finance company, with a borrowing base of inventory by class plus receivables from refiners and wholesale buyers. This is the product that funds growth in a dealer's book.
- Refiner advances. Many refiners advance a portion of a lot's assayed value on receipt and settle the balance after refining. It is trade credit rather than a loan, and it is often the cheapest capital a scrap buyer has.
- Equipment financing. Analyzers, scales, safes, vaults, cameras and coin-counting equipment are financed on the equipment itself, and the purchase may be expensed under Section 179 subject to limits and the owner's circumstances, as explained in the guide to equipment financing and Section 179. Confirm with a tax adviser.
- Commercial real estate loan. On an owned storefront, from a community bank or private real estate lender, where the dealer's industry matters less because the building is the collateral.
- Unsecured term loans and lines. From funding sources whose policy does not exclude the trade, priced on the owner's credit and bank statements. Suited to a fixed need, not to inventory that turns weekly.
- Revenue-based financing. Only where a coin shop runs real card volume, since the advance is sized on processor deposits. Cash-heavy dealers get small offers.
A pawn shop that buys gold combines this list with the loan book structures in the guide to pawn shop business loans, and a jeweler with a scrap desk combines it with the inventory lines in the guide to funding jewelry and luxury resale businesses. The wider set of business funding programs is open to a dealer whose file is built the way the next section describes.
What the lender underwrites and the file to bring
The written anti-money-laundering program where the volume requires one, the named compliance officer and training log, Form 8300 copies, the state dealer registration, and the law-enforcement reporting your jurisdiction requires.
Every lot with cost, acquisition date, class, weight and purity, and its current mark to spot, from a system whose total ties to the balance sheet on the same date.
Refiner contracts, forward sale confirmations, commodities account statements, or turn data showing that metal is sold within days of purchase. A policy with no evidence is read as no policy.
Two years of returns, a current profit and loss statement and balance sheet, and twelve months of statements with cash deposits reconciled to the purchase log and refiner settlements.
All four test one idea: that the dealer earns a spread on metal that moves through the shop quickly, under a compliance program that already exists, rather than holding a position and hoping.
A hypothetical metal-backed line, and the mistakes that end files
Illustrative example: a hypothetical dealer holds $400,000 of bullion at spot, $150,000 of graded coins at dealer bid and $100,000 of scrap lots at assayed value, all hedged through forward sales to its refiner. An asset-based lender might advance an illustrative 75 percent on the bullion, 35 percent on the coins and 60 percent on the scrap, for gross availability of $300,000 plus $52,500 plus $60,000, or $412,500, before reserves and the commitment cap. Remove the hedge and the bullion advance drops first, because that is where the lender's price risk sits. The figures are invented to show the mechanics and are not any lender's terms.
The mistakes that get dealer files declined follow the same logic. No written AML program when the volume requires one. Deposits that cannot be matched to purchase tickets. Inventory counted at retail. An unhedged position the owner describes as an investment. Applications to lenders whose restricted list names gold dealers, which add declines to the file without any chance of approval. And a pawn book, a coin case and a scrap desk mixed into one set of numbers, so no lender can see which business it is being asked to finance.
Where MercFinancial fits
MercFinancial is a commercial funding brokerage in Houston, not a lender. It reads a dealer's file first: inventory by class, the hedge, the compliance file and the owner's credit. From more than 160 wholesale and institutional funding sources, it identifies the ones whose credit policy allows a precious metals dealer and the structure requested, places one file with those sources, and compares the offers. Availability depends on the funding source, and when nothing fits a specialist says so rather than sending the file to a lender that lists the trade. Stephanie, the AI lending assistant, pre-qualifies in two to three minutes with a soft credit pull that does not affect the score, and a free 30-minute call with a funding specialist is the next step.
Frequently Asked Questions
Can a gold buying business get a bank loan?
Rarely from a bank's standard commercial desk, because the business is cash intensive and carries Bank Secrecy Act obligations that compliance teams treat as high-risk customer work. A bank may still write a mortgage on an owned storefront. Working capital for a gold buyer usually comes from asset-based lenders, refiner advances and equipment lenders, with unsecured credit priced on the owner for smaller needs.
Does a precious metals dealer need an AML program to get financing?
Once purchases and sales cross the Bank Secrecy Act rule's volume threshold, a dealer in precious metals, stones or jewels must maintain an anti-money-laundering program, and lenders that fund the trade ask for the written program, the compliance officer and the training record. Below the threshold, lenders still expect Form 8300 filings for cash over $10,000 and deposits that reconcile to purchase tickets.
Do lenders require a coin dealer to hedge inventory?
For bullion, usually yes, or they lower the advance rate until the unhedged position is small. Forward sales to a refiner, a commodities account, a refiner pool account, or a documented practice of selling within days of purchase all count. Numismatic inventory cannot be hedged against a spot price, so lenders discount it deeply and underwrite turns and margin instead.
How is bullion inventory valued for a business line of credit?
At the spot price less a haircut, re-marked regularly, with the advance rate set by whether the position is hedged. Scrap is valued at assayed weight and purity less refining cost, graded coins at a deep discount to dealer bid, and finished jewelry near melt value. Retail prices never enter the borrowing base, which surprises dealers who count their showcase at ticket price.
Can a coin shop use revenue-based financing?
Only if it runs meaningful card volume, because the advance is sized on processor deposits and repaid from them. A coin shop that sells mostly for cash or wire gets a small offer at a high cost. Shops with online sales or a strong card mix can use it for a short-term need, but the inventory itself is better financed through an asset-based line.
Find out what your metal inventory qualifies for before you add to it. A funding specialist reads the inventory by class, the hedge and the compliance file together and tells you which structures fit. Stephanie, our AI lending assistant, pre-qualifies in 2-3 minutes with a soft credit pull that won't affect your score, or book a free 30-minute call with a funding specialist at (830) 587-5022.
Get Pre-Qualified with Stephanie Book a Free 30-Minute CallMercFinancial is a commercial funding brokerage in Houston, Texas. MercFinancial is a broker, not a lender: every loan is made by a third-party funding source, every request is subject to that source's underwriting and credit approval, and loan amounts, advance rates, interest rates, terms, fees, collateral and guaranty requirements vary by funding source and borrower and are not guaranteed. Nothing here is a commitment to lend or an offer of credit, and financing is for business purposes only. Any example in this guide is hypothetical and illustrative; actual terms and outcomes vary. Pawnbrokers are licensed and regulated by each state and may be subject to federal consumer-credit law; dealers in precious metals and jewels have Bank Secrecy Act anti-money-laundering program obligations; financing availability depends on the funding source's policies. This guide is educational only and is not legal, tax, accounting or investment advice.