Pawnshops – Infinite Unknown

Lenders of last resort see heartbreak nowadays

March 14, 2009 by Infinite

If you’d like a reading on how the economy is affecting the average San Franciscan, you could call an economist. You could study wages and layoffs. You might even graph the rise of foreclosures.

Or you could stop into the Provident Loan Association on Mission Street behind the Old Mint.

“It’s heartbreaking,” said manager Ben Shemano. “We have people bringing in their last treasures, filled with unrealistic hopes and expectations.”

Shemano and others at Provident don’t like to think of it as a pawn shop. There are no handguns, toaster ovens or electric guitars in the window. The store – which deals in jewelry, silver and fine art – was founded by the city’s financial bigwigs in 1912 to combat runaway loan sharking. For generations it has been the place to go when a piece of jewelry happened into your hands through inheritance, good luck or a broken heart.

“For years I developed a cozy little business with engagement rings,” Shemano said. “The engagement didn’t work out, someone wanted to go to Mexico, so they sold it.”

Things changed about a year ago. People aren’t coming in for spare cash any more. This is financial life and death.

“This is the worst I have ever seen,” said managing partner Joseph Chait. He would know: His late father took over the business in 1965; his wife’s grandfather started working there in 1952. Chait has been there since 1971.

Businesses in Shanghai are pawning their factories to keep going

March 7, 2009 by Infinite

Shanghai Oriental is so vast it is known locally as the “aircraft carrier” of pawn shops.

And it is thriving as the Chinese economy sinks into the mire. “We’ve had a 30 per cent rise in the number of customers and a 70 per cent rise in the number of inquiries,” said Wang Fuming, its founder.

The flashy Shanghainese, who would have thought nothing last year of buying designer trinkets, are now pawning their Gucci bags and Rolex watches in desperation. “There’s has been a big increase in white collar workers who are mortgaging their luxury goods for emergency cash. That’s been quite apparent,” said Mr Wang.

Display cases inside the store offer Patek Philippe men’s watches for a relatively reasonable 78,000 yuan (Pounds7,800) and diamond engagement rings (the shame!) starting at a modest 1,500 yuan or so.

Interestingly though, the pawn shop is being increasingly used by small businesses, who find it difficult to get loans from the bank.

Down and Out in Beverly Hills: Rolexes, Picassos Hit Pawnshops

November 7, 2008 by Infinite

Nov. 7 (Bloomberg) — The worse the economy gets, the better it is for Jordan Tabach-Bank.

“Business is booming,” said Tabach-Bank, the chief executive officer of Beverly Loan Co. in Beverly Hills, California.

Beverly Loan is a pawnshop. Not just any pawnshop, but the kind that caters to people who hock Cartiers, Harley- Davidsons and Oscar statuettes when they need cash. They really need it now, Tabach-Bank said from a third-floor office, protected by bulletproof glass, off his showroom in the Bank of America building near Rodeo Drive.

“I’ve never seen so many bankers, lawyers, doctors and actors” with valuable things to pawn, he said. He pointed to an 18-carat white gold bracelet with 69 diamonds ($2,900) and an 18-carat yellow gold Rolex Yachtmaster II (“a steal” at $18,500).

With credit drying up at regular lenders, “in many cases now, we’re not just the bank of last resort,” Tabach-Bank said. “We’re the bank of only resort.”

High-end pawnshops aren’t like most of the 10,000 dealers affiliated with the National Pawnbrokers Association, a Keller, Texas-based trade group. The average U.S. pawn transaction is $75, according to the association’s Web site.

$2.7 Million Necklace

At Tabach-Bank’s shop, “confidential collateral loans,” as they’re called, have been made on art works by Pablo Picasso, Andy Warhol and Jean-Michel Basquiat. Amounts loaned range from several thousand dollars to “six- and seven-figure deals,” he said, with clients using the money to cover the mortgage, make alimony payments or finance cosmetic surgery.

South Beverly Jewelry and Loan, also in Beverly Hills, has seen business triple in the past six months, said owner Yossi Dina. Some of the collateral is in a parking lot: About 60 cars, including Ferraris, Porsches and a Bentley.

“We’re making loans today we never used to,” Dina, 54, said. “Millions — never used to have that. We’re selling a necklace now, the client wants $2.7 million.”