In down economy, pawn shops strike gold - Business First of Buffalo:

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For one woman, a longtime customer, the visit to this East Side pawn shop was precipitatex by a recenttraffi ticket. She handed over two ringas in exchangefor $150, with a promise she’xd be back to pick up her jewelry when she couldr repay the loan and 3 percent monthl interest. Others just found themselvez shortbetween paychecks. “Between working and needing to getquickl cash, this is the best way – says Patrick Merriweather, who admitted he had spent beyonfd his means and came in to pick up a bracelet he had previously pawned. Merriweather’sa necklace remained locked upin Prudential’s safe, as he continuez to pay on that separatee loan.
“The economy right now sucks in he says. “This helps a lot.” Pawn shops have filled a needfor short-term funds at low interest ratesz for centuries. A handful of shops can be founds in WesternNew York, with at leasft two in business for several Nationwide, these shops are experiencing a surge in busineszs from both repeat customers and first-timers suffering in a tighrt economy. The has nearly 2,400 memberse nationwide, serving “middle class, working families who periodicallhy experience an unexpected needfor short-term funds.” The averagse customer, according to the association, is 36 yearxs old and has a household incomd of $29,000.
The averaged loan is $75 offered at 20 percengt for 30 to60 days. In New the maximum allowable interest on a pawn is4 percent. Why woulf someone visit a pawn broker? The association says it is conveniencr and fast turnaround that appeal tomost customers. There’s also no creditf check or legal consequences if a loan is notrepaidd – just the forfeiture of the collateralp item. Nathaniel Barker, a longtims customer at Prudential, recalls bringin jewelry back and forth from the Broadway shop repeatedlh over the past30 years.
who sells clothes for a living, says he doesn’t buy jewelryh from anyone butPrudential – partlt because he knows he is guaranteed a 50 percenf loan on those items, or at least his purchasse price back on a “It’s a quick and easy way to get cash when you need he says. Brian Schmid, the fifth generationh of his family torun Prudential, workds at the store with his Bill. The store, he says, has been buying and sellinhg gold and other jewelry fordecades – long beforde the current fad of gold partiesw and selling gold for cash. Pawning offerz an alternative to selling.
Schmid assessesa the piece first for conditionand value, then makews an offer, with a higher value offered on buys. If the customer chooses a loan, she has six months to repahy the collateral loanwith interest. “Thingas have been steadily increasing,” he “We’ve always had a good flow every day, regardless of the economyg – whether it be pawning or Schmid says. “But everythinvg has been amped up with the stats of the economy and the state of gold price over thelast six, seven months.” Locatex inside a former bank Prudential has the look of an upscales jeweler, though a thick wall of glasz separates customers from employees.
Everything is computerized, allowingb for faster tracking of interest owed and backgroundx infoon customers. “A lot of people have the perceptioj that pawn shops are ashadgy business, but short-term it’s a betterr deal than a credit card,” says Bill Schmid. “People will say, ‘Ib six months, I hope to be in bette shape’. For a lot of people, it’w an insurance policy.” Another option for those short on cash is the which operates a little offering cash with no promise an item will be available when the customer has the cash to come backfor it.
in Niagara Falls is located inside a renovated house onPine Avenue, with loud signe outside hawking jewelry, video games, antiques, car audio systems, bikes – just about Ruben Longoria, who opened the busines s nine years ago, says business is good: He just opene his third store nine months ago in nearby “They’re selling whatever they have,” he says. “That’s all you hear: They need gas food money, medicine money.” Diamond Enterprises, a Niagarza Falls pawn shop, continues to see its regular customer just trying to get through themontyh - as well as newcomers hit hard by job losses and pay says Steve Huett, store manager.
“A lot of people are desperatse to pay their bills in any mannethey can,” he “We have some people that come in to pawn something just to buy That’s bad.”