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Obtaining a Money Transmitter License (MTL) requires businesses to demonstrate robust financial health, ongoing solvency, and readiness to manage customer funds safely. Financial requirements are among the most scrutinized parts of money transmitter licensing in all U.S. jurisdictions.
Minimum Net Worth Requirements
Almost all states set a mandatory minimum net worth for money transmitter applicants–typically ranging from $100,000 to $500,000 for the majority of states–but a couple of states require a net worth of up to $2M. This needs to be demonstrated as positive net worth on the company's balance sheet.
Key considerations:
- States may require higher net worth for digital currency, high-volume, or multi-state operators
- Some states impose tiered requirements (e.g., higher net worth for additional branches or greater transaction volume)
- Verification is through audited or reviewed financial statements
Capital and Liquidity Standards
Demonstrating adequate on-hand capital is crucial. Requirements include:
- Financial statements (balance sheets, income statements, cash flow statements) verifying sufficient liquid capital to operate safely and meet obligations
- For new businesses, documentation on startup funding sources and capitalization methods
- Ongoing compliance may require maintaining a minimum liquidity level and submitting regular (often quarterly)financial updates
Surety Bond and Insurance Requirements
A surety bond is required as a financial guarantee to protect customers against loss from business default. Bond amounts generally range from $10,000 to $500,000+, adjusted for business size, risk profile, and transaction volume. You only pay a small percentage of the bond amount as insurance premium.
→ Related How much do MTLs cost?
Financial Statements and Documentation
Typical financial documentation requirements during licensing and renewal include:
- Audited financial statements annually for almost 50% of the states
- Unaudited financials for the rest of the states
- Personal financial statements and credit reports for control persons/major owners
- Ongoing submission of quarterly or annual financials to the licensing regulator
- Proof of a dedicated business bank account with evidence of sufficient operational funds
Required Documents to Prove Liquidity
Regulators typically require the following to prove liquidity:
- Audited or CPA-reviewed financial statements (balance sheet, income statement, and cash flow statement)
- Proof of business account ownership (bank verification letter or account opening documents)
- Details of any lines of credit, loans, or financing agreements (signed contracts, terms, and drawdown schedules)
- Personal financial statements for control persons
Ongoing Compliance and Audits
Maintaining financial readiness is a continuous process:
- Annual audits by an independent CPA are typically required for some states
- Almost all States also require quarterly financials
- Unannounced regulatory exams may occur to ensure compliance with net worth, capitalization, and bond requirements
Readiness Tips and Best Practices
- Work with a financial advisor or CPA to be financial audit ready
- Maintain higher-than-required capital buffers to allow for state reviews, audits, or unforeseen business needs
- Designate staff to track and update multi-state requirements, as standards and forms may change yearly
Bottom Line
Meeting and maintaining financial and net worth standards is essential for licensing success and continued business operation as a money transmitter. Comprehensive planning and expert support are highly recommended for multi-state or high-growth applicants.
State-Specific Variations
Financial requirements for money transmitter licenses vary by jurisdiction:
- California: Net worth of at least $500,000 for most applicants, plus a surety bond based on anticipated transaction volume
- Florida: Net worth of $100,000 to $500,000, depending on location and volume. Surety bond is also mandatory
- Texas & New York: Require higher net worth and may require additional reserves for digital/currency businesses
Check each state's statutes for exact numbers and formulas.
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