NPR - Pawn Shops See Brisk Business In Economic Crunch
by Debra Baer
Morning Edition, November 27, 2008
Befitting a town where image is everything, the Beverly Loan Co. is tucked away on the third floor of the Bank of America building in Beverly Hills, a block east of Rodeo Drive.
It’s an upscale pawn shop in one of the nation’s priciest ZIP codes, and it has become an alternative bank for people who can’t get their bankers to lend.
There’s a Picasso currently in the shop. Owner Jordan Tabach-Bank says he has also had works of art in here by Chagall, Warhol and Lichtenstein. Along with watches by Rolex, Cartier and Patek Philippe. DeBeers diamonds. Baccarat crystal.
Tabach-Bank’s grandfather started the business during the Great Depression. And the fine items for sale today are remnants of tough times for the well-heeled. Either sold outright for quick cash or used as collateral on loans that went unpaid.
Traditionally, he says, a big percentage of his business has been the asset-rich but cash-flow challenged who can’t always call their bankers because of blemished credit. But now he is getting a new kind of clientele: People who do know how to manage their money but can’t get a simple loan on their home equity, or money for their small business or to buy a car.
“Never before have we seen so many white-collar customers — doctors, lawyers, accountants, businessmen and women — getting $50,000-plus loans,” says Tabach-Bank. “Normally these are people with great credit who could go into a bank and get the big loans, but that’s not the case anymore.”
Beverly Loan employee Dan Rifkin says business has been brisk since the Hollywood writers’ strike and the onset of the subprime-mortgage mess, which put a lot of people out of work. Now, it’s the credit crisis and L.A.’s worsening economy.
“One guy came in yesterday,” Rifkin recalls. “He’s owed $150,000 for a movie he did, and the studio bounced the check. He’s got to pay his bills so he came in here and left some items with us and he was happy to pay his bills. He said, ‘I’ll be back in a month to pick them up. Thanks very much.’ “
Beverly Loan Co. is like family. Maybe even more so than family because sometimes you can’t go to family. Or even to associates, says longtime customer Mark Friedman.
“The most I’ve borrowed at one time was about $125,000,” Friedman says. “I was purchasing a piece of property in Hawaii and I was short for about two weeks. I knew I was getting the money elsewhere, but I couldn’t go to anybody else, so I gathered up all my jewelry I had … went in, and 15 minutes later they counted out $125,000 in cash. They didn’t blink.”
Friedman describes himself as an entrepreneur who deals in entertainment, real estate and boxing. One of his multimillion-dollar property deals is tied up because banks aren’t lending like they used to. Short on cash, he pawned a ring to cover his $20,000 monthly expenses.
“I just went in there three weeks ago. Matter of fact, I’ve got the pawn ticket here. I just took my wife’s diamond ring and took it into the pawnshop,” Friedman says.
Anybody can run into a cash crunch, says Tabach-Bank. He tells his customers that they shouldn’t feel stigmatized for having to hock the family jewels.
“Receiving a loan against a beautiful Cartier diamond is no different at all than receiving a loan against your home,” he says.
This entry was posted on Thursday, November 27th, 2008 at 11:29 am
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