NEW YORK TIMES - A Pawnshop to the Rich: Business Is Picking Up
via the New York Times
By CALVIN SIMS
Published: October 26, 1992
The chic boutiques and high-priced department stores here may be emptier today than they have been in the past, but at least one business is thriving in this stubborn recession: the Beverly Loan Company. It is perhaps this city’s best-known pawnshop, at least to some.
With credit tight and unemployment high, more people are turning to pawnbrokers for collateral loans to tide them over.
But if you are looking to pawn a color television or electric guitar, Beverly Loan is not the place to go. Catering mostly to well-to-do residents of Beverly Hills and the west side of Los Angeles, this pawnbroker deals almost exclusively in expensive jewelry or precious metals, like the Rolex watch and other jewels that an auto dealer recently pawned to get $10,000 to make his payroll. Or the diamond and gold jewelry that a Beverly Hills woman pawned for $8,000, which she needed to pay her bill at Chanel. She wanted to buy a new dress there but had exceeded her credit limit.
The number of loans the shop is making has been increasing in the recession. “It’s quick, fast and fairly painless,” said Jean Zimmelman, who runs the 54-year-old company with her sister Helaine. “People love the confidentiality. They don’t want their bankers or friends to know they are down on their luck. We are not interested in a credit history because the loan is based solely on collateral.”
Beverly Loan is one of the few pawnbrokers in the country that makes loans of more than $10,000. One famous customer was the sister of King Farouk of Egypt, who in 1972 pawned her mother’s royal jewels for $369,000 after she was disowned for marrying a commoner.
Recently, the pawnbroker has started accepting fine pieces of art as collateral, but “only the contemporary stuff that I like,” Jean Zimmelman said. A woman recently pawned an Andy Warhol for $1,500 to pay for her wedding. A man brought in a Keith Haring to get $3,000 to buy a car.
Unlike rates in the banking industry, pawnshop rates are regulated by the state, but loans of more than $2,500 are set by the pawnshop based on the value of the collateral. Beverly, which says it has a 20 percent foreclosure rate, generally charges about 4 percent a month for loans exceeding $2,500. In California, the term of a pawn loan is five months.
“This is a glitzy town and some people feel they have to maintain a life style no matter what. Others just need the money to survive,” Jean Zimmelman said. “We don’t ask any questions. We are here to make life easier.”
This entry was posted on Wednesday, October 7th, 1992 at 11:09 am
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