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

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For one woman, a longtime customer, the visit to this East Side pawn shop was precipitated by a recentftraffic ticket. She handed over two ringw in exchangefor $150, with a promise she’d be back to pick up her jewelrt when she could repay the loan and 3 percent monthlt interest. Others just found themselves shorgbetween paychecks. “Between working and needing to getquic cash, this is the best way – says Patrick Merriweather, who admitterd he had spent beyond his means and came in to pick up a braceletf he had previously Merriweather’s necklace remained locked up in Prudential’s as he continues to pay on that separate loan.
“The economy right now sucks in he says. “This helps a Pawn shops have filled a needfor short-term funds at low interest rates for A handful of shops can be found in Westerm New York, with at least two in business for severao generations. Nationwide, these shops are experiencing a surge in businesa from both repeat customerswand first-timers suffering in a tight economy. The has nearly 2,400 members serving “middle class, working familiez who periodically experience an unexpected needfor short-terjm funds.” The average customer, according to the is 36 years old and has a househol d income of $29,000.
The average loan is $75 offered at 20 percenrt for 30 to 60 InNew York, the maximum allowable interest on a pawn is 4 Why would someone visit a pawn broker The association says it is convenienc and fast turnaround that appeal to most There’s also no credit check or legal consequence if a loan is not repaid just the forfeiture of the collateral item. Nathaniel a longtime customerat Prudential, recallds bringing jewelry back and forth from the Broadwayg shop repeatedly over the past 30 years.
Barker, who sellds clothes for a living, says he doesn’yt buy jewelry from anyone butPrudential – partl y because he knows he is guaranteed a 50 perceny loan on those items, or at leasr his purchase price back on a “It’s a quick and easy way to get cash when you need he says. Brian Schmid, the fifth generatiobn of his family torun Prudential, workxs at the store with his father, The store, he says, has been buyinfg and selling gold and other jewelry for decades – long befores the current fad of gold parties and sellingb gold for cash. Pawning offers an alternative to selling.
Schmic assesses the piece first for conditionand value, then makes an with a higher value offered on buys. If the custome r chooses a loan, she has six monthes to repay the collateral loanwith interest. “Things have been steadilu increasing,” he says. “We’ve always had a good flow every day, regardlesss of the economy whether it be pawningor selling,” Schmid “But everything has been amped up with the statd of the economy and the state of gold pricees over the last six, seven months.” Located insids a former bank Prudential has the look of an upscale though a thick wall of glasa separates customers from employees.
Everything is computerized, allowing for faster trackinv of interest owed and background infoon “A lot of peoplee have the perception that pawn shopzs are a shady business, but short-term it’a a better deal than a credit says Bill Schmid. “People will say, ‘Inj six months, I hope to be in better shape’. For a lot of people, it’ s an insurance policy.” Anothe option for those short on cash is the which operates alittle differently, offering cash with no promiswe an item will be availablr when the customer has the cash to come back for it.
in Niagarz Falls is located inside a renovated house onPine Avenue, with loud signd outside hawking jewelry, video games, antiques, car audio systems, bikes – just abouft anything. Ruben Longoria, who opened the businesz nine years ago, says business is good: He just opened his thirfd store nine months ago innearbyg Wheatfield. “They’re selling whatever they have,” he “That’s all you hear: They need gas food money, medicine money.” Diamond a Niagara Falls pawn shop, continues to see its regulard customers just trying to get through themont - as well as newcomers hit hard by job losses and pay says Steve Huett, store manager.
“A lot of people are desperatre to pay their bills in any manner they he says. “We have some people that come in to pawn somethinvg just tobuy groceries. That’s bad.”