A repeated theme here at Kamaaina Loan blog has been the turnaround in the attitude toward pawn shops in the press, probably due to reality teevee more than anything else.
Over the weekend, a kind of milestone in this process occurred when the New York Times published an admiring piece about pawn shops for rich East Siders, based on a 250-year0-old English pawn shop’s first branch in Manhattan. Not only that, although the story was in the “Wealth Matters” section, far inside the bulky newsprint version of the Sunday Times, for a brief time today, the story was on the front page of the Times’ internet edition, until it was pushed off by fresh Chris Christie scandals.
Their fancy East Side store
Now, as a pawn shop, we are happy to have the Times look upon pawn shops as public-spirited businesses, or at least as public-spirited as the big banks the paper writes about all the time. But we do have a couple of comments.
First, the Times is about a year late on this story. Reports about pawning by the rich have been common fare on such sites as CNN for a long time now. Second, the Times may have been late, but its reporting (by Paul Sullivan) was superior:
The high-end portion of the industry is betting that with comparatively lower pawn rates and an ability to fulfill even large loan requests in a day or two, it will be able to build its business on happy repeat customers. Paul Aitken, founder and chief executive of Borro, said he attributed repeat business to the human desire to spend today without thinking about tomorrow.
“Entrepreneurial people like to do things on the spur of the moment, and they’re probably not the best planners,” he said. “When they have money in their pocket, they like to buy luxury goods. When they don’t, they like to use those goods to get money for their next venture.”
And that is how he ends up taking a Mercedes McLaren in as collateral for a loan.
That’s an aspect — we are not necessarilu endorsing it — we haven’t seen in numerous other stories about high-end pawn.
Third, high-end pawn is not, as Sullivan’s story implies, something that arose when banks tightened credit following the Panic of 2008. It’s been part of the business all along. It has probably extended its catchment area since 2008.
Our Wailuku pawn shop. We have a fish.
Fourth, while our pawn shop at 96 N. Market St. is not as flossy as Suttons & Robertsons Upper East Side shop, our Private Viewing Room is just as swank as S&R’s, what with its Chinese antiques and paneling. And — something S&R does not seem to have — its private entrance, for those rich borrowers who don’t want the neighbors to know they are pawning the McLaren. (Actually, in Hawaii law pawn shops cannot make loans on McLarens, but you get the concept.)
Fifth, the bottom line is, as always with pawn loans, would you rather be turned down by a banker or accepted by a pawn broker. Because pawn brokers lend on collateral, and the extra scrutiny that has scared bankers into holding onto their money means nothing to us. Gold is gold, a diamond is a diamond, a Rolex is a Rolex, whether the stock market is booming or crashing.