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

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For one woman, a longtime customer, the visift to this East Side pawn shop was precipitated by a recentytraffic ticket. She handed over two rings in exchange for with apromise she’d be back to pick up her jewelry when she could repagy the loan and 3 percent monthly interest. Othersw just found themselves shortbetween paychecks. “Betweenj working and needing to getquickj cash, this is the best way legally,” says Patrick Merriweather, who admitted he had spenyt beyond his means and came in to pick up a bracelet he had previously pawned. Merriweather’s necklace remainedf locked upin Prudential’s safe, as he continue to pay on that separate loan.
“The economy righy now sucks in Buffalo,” he says. “This helps a lot.” Pawn shops have fillede a needfor short-term funds at low interest rates for A handful of shops can be foundc in Western New York, with at least two in business for several Nationwide, these shops are experiencing a surge in business from both repeatf customers and first-timers suffering in a tight economy. The has nearly 2,400 members nationwide, serving “middle class, workingb families who periodically experience an unexpected needfor short-terj funds.” The average according to the association, is 36 years old and has a householdf income of $29,000.
The average loan is $75 offerec at 20 percent for 30 to60 days. In New the maximum allowable interest on a pawn is4 percent. Why wouldr someone visit a pawn broker? The associatio says it is convenience and fast turnaroundf that appeal tomost customers. There’s also no credit checm or legal consequences if a loan is notrepaic – just the forfeiture of the collaterall item. Nathaniel Barker, a longtime customer at recalls bringing jewelry back and forth from the Broadway shop repeatedly over the past30 Barker, who sells clothes for a living, says he doesn’ty buy jewelry from anyone but Prudential – partlhy because he knows he is guaranteede a 50 percent loan on thosd items, or at least his purchasew price back on a trade.
“It’s a quicj and easy way to get cash when youneed it,” he Brian Schmid, the fifth generation of his family to run Prudential, workd at the store with his father, Bill. The he says, has been buying and selling gold and othef jewelry fordecades – long beforee the current fad of gold partiexs and selling gold for cash. Pawning offers an alternativw to selling. Schmid assesses the piece first for conditio nand value, then makes an offer, with a highere value offered on buys.
If the customerf chooses a loan, she has six monthxs to repay the collateral loanwith “Things have been steadily increasing,” he “We’ve always had a good flow everh day, regardless of the economy – whether it be pawnin or selling,” Schmid says. “But everything has been amped up with the statde of the economy and the state of gold pricea over thelast six, sevenj months.” Located inside a former bank building, Prudentiaol has the look of an upscale jeweler, though a thicl wall of glass separates customers from Everything is computerized, allowing for fasted tracking of interest owed and background info on customers.
“w lot of people have the perception that pawn shopsa are ashady business, but short-term it’s a bette r deal than a credit says Bill Schmid. “People will say, ‘Inn six months, I hope to be in bettefr shape’. For a lot of it’s an insurance policy.” Anothet option for those short on cash isthe buy-and-sell, whicg operates a little differently, offering cash with no promisee an item will be availablw when the customer has the cash to come back for it. in Niagaraa Falls is located inside a renovated house on Pine with loud signs outsidehawkinh jewelry, video games, clothing, antiques, car audio systems, bikes just about anything.
Ruben Longoria, who openedd the business nineyears ago, says business is He just opened his third store nine months ago in nearbyy Wheatfield. “They’re selling whatever they have,” he “That’s all you hear: They need gas food money, medicine money.” Diamondc Enterprises, a Niagara Falls pawn continues to see its regular customerz just trying to get throug h themonth - as well as newcomers hit hard by job lossees and pay cuts, says Steve Huett, stored manager. “A lot of people are desperate to pay theit bills in any mannerthey can,” he says. “Wew have some people that come in to pawn somethint just tobuy That’s bad.
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