Skip to comments.Pawning Rolexes to make payroll
Posted on 08/02/2011 5:11:13 PM PDT by DeaconBenjamin
Squeezed by tight credit and tempted by record high gold prices, small business owners are finding an alternative to the bank: the pawn shop.
More than half of the customers at online pawn shop, Pawngo, are small business owners, said Todd Hills, CEO of the Denver-based company.
"These guys can't wait. They have businesses. They have employees they need to pay," said Hills. "This is a great way to solve a short-term need."
Pawning is a relatively no muss, no fuss process, especially when compared to getting a bank loan. Like a bank loan, the customer is charged interest. Once the loan is repaid, the pawnbroker returns the item to the customer. If the customer can't repay the loan, the pawnbroker keeps the object, with the aim of selling it to recover the loan amount.
With pawning, there are no applications, credit checks or dings to the credit report if the customer defaults on the loan. "You can still bring your stack of papers into the bank, it doesn't guarantee you will get a loan," said Hills.
While individual consumers may walk into a pawn shop with a couple hundred dollars worth of jewelry looking for cash to fill up the gas tank or the refrigerator, small business owners tend to come in with more expensive items, said Ray Shaffman, a salesman at Gables Pawn and Jewelry in Miami.
Gables Pawn and Jewelry has seen customers come in with watches made by Rolex, Cartier and Patek Philippe. It pays between $5,000 and $10,000 each for them, said Shaffman.
"To make payroll is the number one reason" small business owners come to the shop, said Shaffman. "They don't have enough flow, enough cash, to pay their employees. And they got to pay their employees. Otherwise, they have much more complicated problems."
(Excerpt) Read more at money.cnn.com ...
Watching Pawn Stars last night and Rick said pawning was one of the biggest businesses during the depression.
My town just had its first official pawn shop open; as the town falls to the Bronze Horde, it joins a growing list of businesses that signal the end of American culture in a neighborhood. These include check cashing places, new & larger laundromats to accomodate all of the tenants of illegal apartments, restaurants with no English on their signs (or spoken inside), etc. Our downtown could pass as Cali or Bogota now.
The Meadowlands Flea Market outside Giant Stadium has for years been a place where you can get great deals from Americans selling the trappings of their former middle-class existence for pennies on the dollar. Naturally, most of the buyers no habla ingles; they’re the only ones left as consumers here, spending their untaxed wages as Americans can’t find work.
If the boss must pawn the Rolex to make payroll, probably the handwriting is on the wall.
Vancouver offers a comprehensive compensation program. It is also a convenience to the Canadian.