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  • Oldest form of Lending for Bad Times or Good Times?

    Ladies and Gentelmen in Pawnland!

    Here is another interesting read we pulled off the wire today. Hope you enjoy the read, because the ride in our business is just really starting to get FUN!

    I think it is interesting to denote that in lieu of the not recent downturn in our economy and the financial markets, more than ONE TRILLION Dollars of plastic credit has vaporized and more than ONE TRILLION IN HOME EQUITY LOANS has vaporized as well. This economic environment we are in is affecting every facet of everyone’s lives, except for the extremely high net worth individuals out there.

    Jerry Whitehead

    Posted by Wealth Wire – Thursday, August 4th, 2011

    One of the oldest forms of loaning money is the Pawn Broker business model.  It can be traced back to the Greek and Roman Empires, and in China as far back as 3000 years ago.

    With gold prices at record highs, this very simple loan transaction is becoming popular with business owners as a way to meet expenses. The boss is hawking his gold watch to pay the staff…

    This from CNN Money:

    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, who launched Pawngo in June. “This is a great way to solve a short-term need.”

    While these loans are not cheap – some carry APRs of almost 100%, for many business owners it is the only available option.

    The article continues:

    “We have lost a trillion in credit card lines. We have lost a trillion in home equity lines. And those are — or were — the two primary sources of financing,” said Bob Coleman, editor of the small business lending industry publication, “Coleman Report.” “There are different things that are filling that void until banks ramp up.”

    Fabian Videla, the owner of Slim Protein in Jacksonville, Fla., went to Pawngo after he ran out of savings and when a bank would not lend to him.

    “By the time that I contacted them, I was kind of running out of options and that was a good one,” said Videla, whose company sells a weight-loss program.

    But many of the folks that are using the pawn brokers don’t mind the higher charges. These transactions do not require mountains of paperwork or credit checks. The customer can walk out with the much needed cash with in minutes, and keep their business running — for now, at least.

    Jerry Whitehead 

    Pawnshop Consulting Group, Inc.

    www.pawnshopconsultinggroup.com

    www.pawnsymposium.com

    jerry@aea.238.myftpupload.com

    954-540-3697

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