Though the economy has been a nightmare for many of us, some businesses are actually doing better under conditions of tightened consumer spending and skyrocketing unemployment.
Demand is high for small loans, cash in an instant, and bargain shopping. The price of gold seems to be headed for the heavens. All of this makes it a great time to be a pawnshop owner.
Pawnshop profits are surging as customers come in droves seeking great deals and collateral loans with no credit check requirements. Reality shows like Pawn Stars have provided the industry with added visibility, drawing new customers to pawnshops throughout the country.
For those who have maxed out their credit card cash advances, a pawn shop loan may be the next best thing.
Ezcorp Inc., owner of 22 EZ Pawn shops near San Antonio, Texas, reported that its income increased 34 percent between January and March 2011. Cash America International Inc. operates 24 shops in the same geographic area.
Its stock price has increased 52 percent this year, reaching a record 59.74 cents per share earlier this month.
Monday’s gold price increase to an all-time high of over $1,600 per ounce represented additional positive news for the pawn shop industry. When gold prices are high, people head to pawn shops to sell their jewelry and other gold items for cash.
Some shops report their business has become stronger simply from increased pawning and buying of gold.
Even when collateral loan demand remains flat, rising gold prices yield higher average loans due to more customers supplying gold jewelry. The majority of pawn shop customers repay their loans on time but store owners are noticing an increase in the number of people losing collateral due to inability to repay the money.
One store in Texas estimated that 95 percent of its inventory came from unpaid loans.
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[...] Pawnshops And Also Pawnbroking Profiting From Poor Economic Climate [...]