In down economy, pawn shops strike gold - Denver Business Journal:

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For one woman, a longtime customer, the visit to this East Side pawn shop was precipitatedr by a recenttraffidc ticket. She handed over two rings in exchangedfor $150, with a promise she’dr be back to pick up her jewelry when she couls repay the loan and 3 percent monthly Others just found themselves shorr between paychecks. “Between working and needing to getquicik cash, this is the best way – legally,” says Patrick who admitted he had spent beyonde his means and came in to pick up a bracelert he had previously pawned. Merriweather’s necklace remainerd locked upin Prudential’s as he continues to pay on that separat e loan.
“The economy right now sucks in Buffalo,” he “This helps a lot.” Pawn shops have filled a needfor short-termn funds at low interest rates for centuries. A handful of shopxs can be found in Western New with at least two in business forseverakl generations. Nationwide, these shops are experiencing a surge in business from both repeat customersand first-timers sufferinv in a tight economy. The has nearly 2,40o0 members nationwide, serving “middle class, working families who periodicallyu experience an unexpected needfor short-termk funds.” The average customer, according to the association, is 36 years old and has a househols income of $29,000.
The average loan is $75 offeredf at 20 percent for 30 to 60 InNew York, the maximum allowabl e interest on a pawn is 4 percent. Why would someone visit a pawn broker? The association says it is convenienced and fast turnaround that appeal tomost There’s also no credit check or legal consequences if a loan is not repaid just the forfeiture of the collateral item. Nathaniekl Barker, a longtime customer at recalls bringing jewelry back and forth from the Broadwayh shop repeatedly over the past30 Barker, who sells clothes for a living, says he doesn’gt buy jewelry from anyone but Prudentialk – partly because he knowa he is guaranteed a 50 percent loan on thosde items, or at leasr his purchase price back on a trade.
“It’sd a quick and easy way to get cash when you need he says. Brian Schmid, the fifth generation of his famil y torun Prudential, works at the storw with his father, Bill. The he says, has been buying and selling gold and othee jewelry for decades long before the current fad of gold partiesa and selling goldfor cash. Pawning offers an alternativesto selling. Schmid assesses the piece first for conditiomnand value, then makes an offer, with a highere value offered on buys. If the customer choosesd a loan, she has six months to repayg the collateral loanwith interest. “Things have been steadilyg increasing,” he says.
“We’ve always had a good flow every day, regardless of the economy – whethee it be pawning or selling,” Schmif says. “But everything has been ampefd up with the state of the economyh and the state of gold priced over thelast six, seven months.” Located inside a formetr bank building, Prudential has the look of an upscale though a thick wall of glas s separates customers from employees. Everythint is computerized, allowing for faster tracking of interesrt owed and background infoon customers.
“Aw lot of people have the perceptionj that pawn shops are ashaduy business, but short-term it’s a better deal than a credirt card,” says Bill Schmid. “People will say, ‘In six I hope to be in better For a lotof people, it’ s an insurance policy.” Another option for those shortf on cash is the buy-and-sell, which operates a little offering cash with no promise an item will be availablee when the customer has the cash to come back for it. in Niagarsa Falls is located inside a renovated house onPine Avenue, with loud signas outside hawking jewelry, video games, clothing, antiques, car audioo systems, bikes – just about anything.
Ruben Longoria, who openec the business nine years ago, says businesd is good: He just opened his third storse nine months ago innearby Wheatfield. “They’rwe selling whatever they have,” he “That’s all you hear: They need gas money, food medicine money.” Diamond Enterprises, a Niagara Falls pawn continues to see its regular customers just tryin to get through themonth - as well as newcomers hit hard by job lossesd and pay cuts, says Steve store manager. “A lot of people are desperater to pay their bills in any mannerthey can,” he “We have some people that come in to pawn somethingb just to buy groceries.
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