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

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For one woman, a longtime customer, the visif to this East Side pawn shop was precipitatedx by a recenttraffic ticket. She handed over two rings in exchang efor $150, with a promise she’d be back to pick up her jewelryh when she could repay the loan and 3 percent monthly Others just found themselves short between paychecks. “Betweejn working and needing to get quick this is the bestway – legally,” says Patrick who admitted he had spent beyond his means and came in to pick up a bracelegt he had previously pawned.
Merriweather’a necklace remained locked up in Prudential’s as he continues to pay on thatseparate “The economy right now suckzs in Buffalo,” he says. “This helpsz a lot.” Pawn shops have filled a needfor short-terj funds at low interest rates for A handful of shops can be foundd in Western New York, with at leasg two in business for several generations. Nationwide, these shop s are experiencing a surge in business from both repeat customerxsand first-timers suffering in a tight The has nearly 2,400 members nationwide, servin “middle class, working families who periodically experienc an unexpected need for short-termn funds.
” The average according to the is 36 years old and has a householdd income of $29,000. The averagd loan is $75 offered at 20 percent for 30 to60 days. In New York, the maximum allowablre interest on a pawn is4 percent. Why wouldc someone visit a pawn broker? The association says it is conveniencd and fast turnaround that appea l tomost customers. There’as also no credit check or legall consequences if a loan is notrepaix – just the forfeiture of the collateralo item. Nathaniel Barker, a longtime customer at Prudential, recalls bringing jewelry back and forth from the Broadwat shop repeatedly over the past30 years.
Barker, who sell clothes for a living, says he doesn’t buy jewelry from anyonde butPrudential – partly because he knows he is guaranteecd a 50 percent loan on those or at least his purchaswe price back on a trade. “It’s a quicok and easy way to get cash when youneed it,” he Brian Schmid, the fifth generation of his family to run works at the store with his father, The store, he says, has been buyin and selling gold and othet jewelry for decades – long before the curreny fad of gold parties and selling gold for cash. Pawning offers an alternative to selling.
Schmir assesses the piece first for condition and then makesan offer, with a higher valure offered on buys. If the customer chooses a loan, she has six monthzs to repay the collateral loanwith interest. “Things have been steadily he says. “We’ve always had a good flow everu day, regardless of the economy – whether it be pawnintg or selling,” Schmid says. “But everything has been ampecd up with the state of the economy and the statw of gold prices over thelast six, seven months.” Locate inside a former bank Prudential has the look of an upscale though a thick wall of glass separates customere from employees.
Everything is computerized, allowing for fastert tracking of interest owed and background infoon “A lot of people have the perceptioh that pawn shops are a shady business, but short-term it’ws a better deal than a credit card,” says Bill “People will say, ‘In six months, I hope to be in bettere shape’. For a lot of people, it’s an insurance Another option for those short on cash is the which operates a little offering cash with no promise an item will be availablee when the customer has the cash to come backfor it.
in Niagarqa Falls is located inside a renovated house on Pine with loud signs outsidehawkinh jewelry, video games, clothing, car audio systems, bikes – just about Ruben Longoria, who opened the business nine years ago, says business is good: He just openes his third store nine monthxs ago in nearby Wheatfield. “They’rwe selling whatever they he says. “That’s all you hear: They need gas food money, medicine money.” Diamondc Enterprises, a Niagara Fallsa pawn shop, continues to see its regular customers just tryingg to get through themonth - as well as newcomersx hit hard by job losses and pay cuts, says Steve Huett, store manager.
“A lot of peopl are desperate to pay their bills in any mannerethey can,” he says. “We have some people that come in to pawn something just tobuy groceries. That’s bad.”