As a general rule, pawnbrokers make loans of money on the security of personal property which the pawnbroker holds until the loan is repaid, and title pledge lenders make loans on the security of automobiles and other titled property, with the pledgor usually retaining possession of the vehicle and the title pledge lender holding the certificate of title as security. Although a single business can and often does operate as both a pawnbroker and a title pledge lender, each activity is separately regulated under Tennessee law. In order to conduct a pawnbroker business, the business must obtain a pawnbroker license and operate under the requirements of the Tennessee Pawnbrokers Act of 1988. In order to conduct a title pledge lender business, the business must obtain a title pledge lender license and operate under the requirements of the Tennessee Title Pledge Act. The requirements of each act are similar, but there are significant differences both in the requirements for licensure and in the rules for operation of the business.

A pawnbroker license does not authorize its holder to act as a title pledge lender, and a title pledge license does not authorize its holder to act as a pawnbroker. The requirements for each license must be met separately. With the appropriate license(s), a business can operate as either a pawnbroker, a title pledge lender, or both.