If you’re interested in learning some interesting and useful facts about pawn shops, then you’ve come to the right place. In this guide, we’re going to examine some fascinating facts about pawn shops, and you’ll quickly discover the many benefits they can provide – especially if you need a convenient short term loan to make ends meet. With this in mind, let’s get started.
To begin with, what exactly is a pawn shop? To put it simply, a pawn shop is a type of business that allows you to bring your valuables into the pawn shop, have them examined and valued, then receive a specific cash amount in exchange. But rather than selling the item outright, it’s possible to have them hold the item for you – so you can purchase it back at a later, pre-arranged date. This is known as a pawn loan.
For many people, this service is a lifesaver – especially if you need some fast cash to keep your finances afloat. What’s more, they are a lifeline for people who have bad credit ratings, and simply have no other option available when it comes to receiving a short term loan. Because of this, pawn loans are becoming very popular – and the demand has really boomed over the last few years.
Now, with this in mind, let’s take a closer look at some interesting facts about pawn shops!
Fact 1 – The History channel caused a huge popularity surge
Ever since the History channel commissioned the TV show known as Pawn Stars, the demand for pawn shops has seen a massive boost. This TV show educated and informed the general public about how pawn shops really work, and how they can be a great way to earn extra cash.
Perhaps one of the biggest drawbacks to using a pawn shop is simply understanding how the process works – and this lack of knowledge is one of the main reasons why people avoid them. However, this hit TV show has certainly gone a long way towards explaining and demystifying the process.
Fact 2 – They aren’t just for poor people
One of the biggest cliches surrounding the pawn shop industry is that they’re only used by the poor and desperate. However, some of the biggest clients of pawn shops tend to be wealthy people who are simply cash poor, but have a lot of money wrapped up in expensive jewelry, properties, or business.
Because of this, it’s not uncommon to see wealthy individuals frequenting pawn shops to raise money for further business ventures and similar enterprises. These days, there’s no stigma associated with using a pawn shop, and nobody is going to think you’re poor, desperate, or vulnerable for using their services.
Fact 3 – The average loan is just $150
One of the hardest type of loans to receive from a bank is the small loan. Often, it’s simply not worth the time and hassle to lend such a small amount, which can make it difficult if you only need to receive a small amount of cash. However, the humble pawn shop specializes in this form of small cash loan, and it’s possible to receive a loan as low as $20 in most shops. Of course, this is highly convenient for the person who just needs some quick cash.
Fact 4 – Cash for gold is huge
Ever since the recession hit in 2008, the cash for gold market has become incredibly popular – and this is another specialty of the pawn shop. Research has revealed that the market has boomed over recent years, with estimates of a 40% increase not being too outrageous.
By allowing people to trade their gold items for cash, the pawn shop offers a crucial service for people who may have expensive jewelry and watches lying around the home, and would rather receive the true cash value than hold the gold.
Fact 5 – The recession hurt sales, but boosted loans
The two primary services offered by the pawn shop are direct sale of goods, as well as the pawn loan. However, ever since the 2008 recession, sales have seen quite a decline – with few people being interested in parting with cash for valuable items. However, the pawn loan has seen a massive popularity of boost, which just goes to show how versatile the pawn shop can be.
Fact 6 – They’re used frequently
Recent studies into pawn shop transactions have revealed that many people use these shops very frequently. In fact, over 80% of customers admit to taking a pawn loan out at least twice a year – with a further 40% claiming to have taken out a loan over 5 times. This shows that the customers of a pawn shop are using the loan service on a regular basis, often to make ends meet – or to stretch their finances a little further.
Fact 7 – Business owners use pawn shops too
One of the most interesting uses of a pawn shop is by the small business owner who needs to make extra cash for payroll.
Small businesses can hold plenty of value, but unlocking the cash thatís been invested in them isnít always easy. If itís been a particularly lean month for a small business, then a pawn shop loan becomes a vital service that allows the payroll to function – without the business having to tap into greater assets, or worse still, declare bankruptcy.
Overall, itís safe to say that the humble pawn shop provides a vital service to our modern economy, and it offers a lifeline for many. Now that you’ve read this guide, you should have a better understanding of the crucial service they provide, and you’ve also learned a few interesting facts about pawn shops along the way!