According to this Huffington Post story, in the five years 2007-2012, the number of pawn shops in the United States grew from 6,400 to 10,000. We’re not too confident in the numbers. Nobody really keeps track, and other sources claim the country has about 12,00o pawn shops. If it is correct that there are 3,600 more pawn shops than there were before the stock market swoon of 2008, then that’s 2 new ones a week. It also means there are about as many pawn shops as McDonald’s hamburger stands. Whatever that says about us. On the other hand, the number of gas stations dwarfs both pawn shops and Mickey Ds at 159,000, but that’s down from 200,000+ 20 years ago (and down from over a quarter of a million in the cheap gas era of the 1950s). (Numbers from a website called howmanyarerthere.org, where you can play this comparison game all day long.) Well, whatever the exact number, the Huffington Post story fingers the reluctance of the big banks to lend to “non-standard” people and the decline of the “community banks,” which were allegedly a source of money for such folks in the past. We doubt the accuracy of that. The most we’d accept is that smaller banks were prepared to make smaller loans that the big ones wouldn ‘t bother with. On the other hand, really small banks couldn’t lend much, because regulators tried to prevent them from making loans that were a large fraction of their capital. On the third hand, for Huffington, “small” means up to $100 million, which is enormous by pawn shop standards. Even the big chains don’t have total loans that approach that. Most of those 10,000 pawn shops do under a million a year, probably. But the point, made to Huffington by our friend Jerry Whitehead (a consultant who advises Kamaaina Loan) is that:
pawnshops are focused on consumers who are “getting forgotten in the banking system.”
We’d put it another way. Unlike other lenders, pawn shops don’t turn away anybody. If you’ve got collateral, we’re good to go.