Tags: Wealthy | use | pawnbrokers | NYC

Crain's: Wealthy Increasingly Use Pawnbrokers in NYC

By    |   Tuesday, 18 March 2014 08:05 PM

The pawnbroker business is expanding rapidly in New York City, and it's not just poor people who are customers, Crain's New York Business reports.

The number of pawnbrokers and secondhand dealers has jumped 50 percent in New York City since 2010, according to the police department. New York is host to 493 pawnshops, according to the Department of Consumer Affairs.

Pawnbrokers make loans to people who put up merchandise as collateral. A pawnbroker can help a wealthy person with a quick need for cash. "We help fill in the gap when a borrower doesn't have the assets that a bank wants to see on a loan application," Tom McDermott, U.S. general manager for pawnbroker Borro, told Crain's.

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Borro customers frequently have assets that are difficult to value and can't be easily converted into cash.

The money doesn't come cheap, though. Annual interest rates can run as high as 48 percent.

Crain's cites the case of Marc Kaye, a consultant who needed quick cash to pay his children's tuition bills at Columbia and Harvard. He pawned a Picasso sketch for $65,500.

"I was in just a little pinch, and this was an elegant and discreet way to get cash," Kaye told Crain's.

As for bank lending, the total of commercial and industrial loans soared at an annual rate of 28.4 percent in February, according to the Federal Reserve.

Bank of America had the largest portfolio of loans in the fourth quarter — $930 billion, according to financial information service Trefis. Wells Fargo was second, at $820 billion.

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The pawnbroker business is expanding rapidly in New York City, and it's not just poor people who are customers, Crain's New York Business reports.
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2014-05-18
Tuesday, 18 March 2014 08:05 PM
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