Wednesday, January 14, 2009

Can’t get a loan? Want to support local businesses? Try a pawn shop

Pawnshops take on mantle of banks as ill wind blows in new class of customers

Yesterday afternoon in West London a young family walked into a newly upholstered high street store and pawned some jewellery in return for a loan to help to pay the rent. H&T pawnbrokers announced yesterday that it would make larger profits than expected. It has grown from 59 stores to 105 in the past four years and will add another 16 outlets to the chain in 2009. John Nichols, chief executive, described the current economic climate as “very good for us”. The Hammersmith branch of H&T feels more like a building society or a bank: upholstered in pine, jewellery hanging on blue velvet beneath glass counters and two booths where engagement rings and watches and family silver may be exchanged as security for a loan at 8 per cent interest per month.

Posted by drewster @ 03:12 AM (1146 views)
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6 thoughts on “Can’t get a loan? Want to support local businesses? Try a pawn shop

  • Banks’ll be taking your trinkets for cash soon.

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  • Robert Beckman author of Downwave – Surving the Second Great Depression state in this book: that one of the first signs of a depression onset is an escalation in Pawnbroking.

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  • Over a year ago, MoneyWeek magazine tipped H&T Pawnbrokers as one clear beneficiary of the recession. Looks like they were right!

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  • 1.08^12=2.52
    so 8% a month is 152% APR (have I done the maths right?)… for a secured load… that sounds quite BAD to me!

    OK so the collateral is jewellery but it is still a secured loan… What sort of LTV do you get from a pawn broker?

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  • down wave: I remember Beckman’s prediction of a long bear market starting in the mid-80s or thereabouts. Not sure his prophecies can be trusted too much.

    titanic: We will shower you with profiteroles.

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  • Kelvin Newman says:

    It certainly makes a lot of sense for them to thrive, whether it’s the best option for those doing the pawning though is another matter!

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