The Biggest Little Pawn Shop In Beverly Hills
by Mark Hunter
You might think that Beverly Hills is not the place to look for a pawn shop, but you would be wrong. Even residents of this poshest of communities require brokers who will turn possessions into cash immediately – and discreetly. Foremost among these money sources is the Beverly Loan Company, one of the world’s most unusual lending institutions. In this shop, loans are granted only on precious metals or jewels, and a single transaction may involve many thousands of dollars.
“Most americans think of a pawnshop as a place for skid-row customers,” says Harry Zimmelman, thirty-four, whose father and uncle – Jules and Louis – founded Beverly Loan in 1938. “We get people with fabulous addresses. Right off the bat, I could name you ten clients who drive Rolls-Royces.”
The Zimmelmans’ offices are located a few blocks from the Beverly Hills’ commercial center in a modern bank building on Wilshire Boulevard. Proximity to a bank is deliberate; the company stores its clients’ valuables in the vault downstairs. The Zimmelmans are very security conscious.
Entering the thickly carpeted reception area, I find myself facing an inch-and-a-half-thick wall of bulletproof glass patterned with alarm wires that connect to the nearby Beverly Hills police station. Across from two leather armchairs stands a display case filled with silver and porcelain heirlooms. No other merchandise is visible except on the walls, which are adorned with works by Picasso, Renoir, Raphael Soyer, and other major artists. On the other side of the glass are two large desks, each equipped with a gem microscope, gold and diamond scales, a crescent-shaped diamond weight estimator, and a refractometer, which gauges the light passing through a gemstone. A teak-and-ivory elephant raises its tusks over a bookcase containing back issues of Connoisseur magazine and volumes on antiques.
Even early in the morning the Zimmelmans have customers. While I wait, two men in gold-buttoned blazers join me. “I’ve been coming here for ten years, and it’s never been like this,” one says to the other with annoyance. “Used to be, there’d be ten people here in a whole day. Now they’re lined up in the street.” With a glance at me, they leave.
A few minutes later I’m ushered in by Jules, seventy-five, a stocky man with an amiable but watchful air, and Harry, who smiles warmly at me; later I speak with Louis, expansive, jovial, seventy-seven.
They confirm what the man in the foyer said. “Nearly every day is a new record for loans,” says Jules. “Yesterday we wrote up fifty. On the average, I would say our clientele has doubled in the last year to thirty-five or forty customers a day.” This increase, I am to learn, reflects not only turns in individual fortunes and the local economy but shifts in the world’s political climate.
Our conversation has hardly begun when a woman in dark glasses and a head scarf appears. After Jules greets her cordially and seats her, she asks for a $500 loan on a diamond ring – her “collateral,” in the parlance of the trade. “Let’s make it four-fifty,” says Jules. “The market’s really depressed right now.” She agrees, and he asks to see her identification; every transaction here is reported to local and state authorities to ensure that no stolen goods are involved. A moment later, Jules hands her the money and she exits.
“As fast as it takes to write up the loan and count it out, they’re gone,” says Harry, snapping his fingers.
In order to reclaim her ring, that woman will have to pay back her loan, plus interest, within seven months. Interest rates are determined under California law by a complicated formula that inexplicably discourages loans of between $2,000 and $10,000. On the first $225 loaned, the state allows 2.5 percent monthly interest; on the next $400, the pawnbroker can charge only 2 percent, and so on, down to 0.83 percent for the largest loans, up to $10,000.
“On a two-thousand-dollar loan, the state allows us only 20.32 percent per annum,” says Jules, “and you can’t count on going to a bank and borrowing money for that today. Naturally, nobody makes loans at those rates of interest. But on ten thousand dollars or more, the rates are negotiable. We like those loans.”
Moreover, the Zimmelmans have that segment of the business almost to themselves. According to Dennis Hooker, the president of the California Collateral Loan Association, “There are only a few pawnbrokers who make loans over ten thousand dollars in the entire state of California, and Beverly Loan is one of them.”
The Zimmelmans started out not in pawnbroking but in the diamond trade. When World War II disrupted the family jewelry dealings, however, Jules and Louis decided to enter the loan business.
By the mid-1950’s, Beverly Loan was well established, thanks in large part to the film industry, which provided a dependable clientele. “Actors would live it up while they were working,” Louis recalls, “then borrow money till they had another picture. Nowadays, most of them have mangers who keep them on a steady salary, so we don’t see them as often” – with a few exceptions, like the actor who drops by occasionally to pawn a ring for a thousand dollars, knowing his manger will redeem it for him.
A few film people used the Zimmelmans more creatively, though. “There was one beautiful young starlet who started out borrowing fifteen or twenty dollars,” says Louis. “Most of her money went for clothes, to put up a good front, and it was a smart move. She became one of the top stars of her era. The last time we saw her, she came in for a thirty-thousand-dollar loan . She didn’t want to go to a bank.”
Why not? Perhaps because of the Zimmelmans’ reputation for confidentiality in a town that sometimes values discretion even more highly than publicity.
Equally important, they require neither financial statements nor credit references. “We’re a cash-flow service,” says Jules. “We don’t ask what you’re going to use the money for, the way a bank would. We assume you just need it.”
As we talk, a lovely blonde in a crisp white pantsuit enters the shop. Jules measures the stone on her diamond ring and offers her seventy dollars. “It’s not worth it to me to pawn it for that,” she says. “That ring cost my fiance seven hundred fifty dollars a few months ago.” Jules is firm: “These things are worse than cars,” he says. “The minute you get out of the store, they depreciate.”
The blonde leaves without her loan, and Harry notes that a growing segment of the company’s clientele consists of women who have split with husbands or fiances. “In this state, when a man gives a woman jewelry, it’s hers,” he explains. “Very often there’ll be a reconciliation and the woman will come in to pick up her ring. Or she’ll find another boyfriend, who’ll get it out of pawn for her.”
“Men collect jewelry, too,” Jules adds. “You’d be amazed. We had one fellow come in, the boyfriend of an Italian princess. A gorgeous dresser with the most beautiful jewelry – he pawned everything. Very down on his luck, but he came here in a taxi. I said, ‘Why not take a bus?’ ‘I couldn’t be seen on a bus,’ he says. ‘All right, then, why not get a job?’ And he says, ‘I’m not a laborer.’ But he made out. He’s in New York right now with another rich lady.”
Harry excuses himself to take care of a customer. In a moment he invites me to join them, and I’m introduced to an Englishman who’s borrowing eight hundred dollars on a few ounces of scrap gold – money he’ll use to buy and sell more gold, at a profit. “He’s financing my business, same as a bank,” he says with a nod toward Harry, “only the bank wants more collateral.”
“It took me only a second to figure the value of his loan,” says Harry, removing the gold from a set of scales that have been in his family for a hundred years. “Plus, he’s a reasonable man.”
“I don’t ask for more than I need,” says the Briton stiffly. “I have to get the gold back, you know.”
Collateral loans account for a large share of the company’s trade. “There’s a restauranteur nearby who borrowed four thousand dollars this year, a little bit at a time. Now his business has taken off, and we’re on a first-name basis. He thinks we’re God,” says Louis, laughing. Adds Harry, “One of the biggest realtors in Beverly Hills has had the same loan with us for fifteen years. It’s just two hundred dollars, but it got her started. She keeps it current for luck.”
Judging from the Zimmelmans’ present trade, she may need some luck. The rise of interest rates on home loans has severely depressed the real-estate market, and in the past two years Beverly Loan has done business with a growing number of realtors.
Harry next makes a loan to a handsome couple wearing clothes that show the unmistakable flair of Milan. They are indeed Italians, he tells me afterward, two of several who’ve appeared at Beverly Loan since Italy’s upsurge in Red Brigade terrorism. Over the past four decades, the Zimmelmans’ clientele has in fact reflected a plethora of political upheavals. Among their early customers were members of the deposed Romanoff dynasty of czarist Russia. (The Zimmelmans, who are Jewish, do not mention the irony that the Romanoffs were notoriously anti-Semitic.) In the 1930’s and 1940’s, there were Eastern Europeans, fleeing first Hitler and then the Russians. A decade later came Cuban exiles, who fled with their gold in the wake of Castro’s victory. Current clients include Southeast Asians who emigrated to America following the Vietnam War and Persians forced from Iran after the overthrow of the Shah. The Zimmelmans have also dealt with numerous Argentines and Filipinos escaping their countries’ repressive regimes. “Everyone comes to America, and some of ’em find their way here,” says Harry. “If you don’t have a credit rating, where else are you gonna go but a pawn shop?”
Not all the Zimmelmans’ foreign customers are in difficult straits, by any means. One of Harry’s regular clients is a Saudi Arabian princes who takes out loans on her diamonds when she’s between ten-thousand-dollar monthly checks from her oil-rich father.
He greets another client, a man in his fifties, and writes up a loan on his diamond bracelet. “I’m semiretired, fixing to open a rest home,” the man tells me. “Rather than go to my savings-and-loan and disturb my interest, I’ll come here and pawn a piece of jewelry. But I never put anything in pawn unless I have a plan to get it out.” He smiles at Harry and adds, “You can’t even get a hundred dollars at some pawn shops.”
“They don’t have the money,” says Harry simply.
Neither would the Zimmelmans, if it weren’t for the steady customers who repay wither loans on time, thus providing Beverly Loan with a dependable interest income. About 98 percent of the company’s clients redeem their loans. “We prefer it that way,” Harry says, “and it’s less work for us, too. We don’t want to sell someone’s personal property.”
Have clients come back after their collateral was sold, wanting to redeem it? “I had one man who showed up a year and a half later for his things. He’d been in the hospital, but we can’t keep the collateral forever.” Adds Louis, “The key to this business is rapid turnover. For example, the other day we sold some diamonds for forty-three thousand dollars. We only made five percent on the sale, but we made it right away.”
Besides diamond traders, the Zimmelmans’ buyers for unredeemed goods include former loan customers, like the one who pawned his diamond-encrusted watch, ring, and belt buckle twenty years ago to go into the pharmaceutical business. “He made it big,” says Jules, “and since then he’s spent a couple of hundred thousand dollars a year with us on jewelry.”
On occasion the company has been burned by fraudulent collateral, particularly paintings – which the Zimmelmans no longer accept. “We’re just not that knowledgeable about art,” says Jules, looking sadly at the pictures on his walls, some clients’ collateral. “We sold a Corot in London five years ago, and there were disputes over whether it was genuine or not. A few galleries wouldn’t touch it. We had papers, but you know what they say about Corot: He painted a thousand pictures, and ten thousand of them are in America alone.” The work finally sold, but at a drastically reduced price.
The stream of clients continues. A UCLA coed, who may already know more about life than she’ll ever learn at college, redeems the jewelry she pawned to settle a hotel bill when her parents neglected to wire her money to cover it. A woman who dented her fender in an auto accident and was afraid to ask her husband for cash to repair it retrieves a necklace with her allowance money. Another pawns a ring to cover her gambling debt to a poker palace in nearby Gardena. A man marches in, peels off his jeweled watch, and announces: “I need fifty bucks to take some people to lunch.” Comments Louis, “Any reason a person needs money, and they can’t get it any other way, they go to a pawn shop. Why? Because they get it right away -it’s the convenience.”
Then in comes a woman who needs funds to pay for her daughter’s dental work. “An awful lot of our business these days seems to be medical problems,” Louis tells me later. “These are younger people, not on Medicare, whose bills are out of proportion to what they make – and doctors and hospitals want their money quick.
“One time a woman needed five hundred dollars, but I could only give her four hundred,” he muses. “It turned out she needed it for minor surgery. I told her, ‘Take the pawn ticket to the doctor and tell him this is all the money you have. If he won’t take it, I’ll give you your ring back and I won’t charge you anything.’ The doctor took the lesser amount.”
An agitated-looking man appears in the foyer and tells Harry, “I need money for gas.” Harry lends him ten dollars against his watch. Afterward he tells me, “That’s one of the smallest loans I’ve ever made.”
He sits down, then suddenly leans forward and asks, grinning, “Say you were in Beverly Hills, you needed money, and you didn’t know anybody – what would you do?”
What could I do? I take off my watch and hand it to Harry, asking what he’d give me on it. “If this was gold,” he says, “I’d lend you ten dollars. We don’t handle stainless or base metal.” Opening a drawer, he picks up a touchstone, a centuries-old device for testing gold. Deftly he rubs the watch against the stone, leaving a streak to which he applies nitric acid with an eyedropper. The streak remains. “This is a gold watch,” says Harry. I put it back on, feeling ten dollars more secure.
Before saying good-by, I ask Harry if the Zimmelmans ever socialize with their clients. “Oh, no,” he replies. “Never. You don’t want to get too close. Some of our clients do consider us friends, but we don’t mix business with pleasure.” He pauses, smiling at the echo of his words. “Actually, this business is a pleasure. I love it.”
This entry was posted on Monday, February 21st, 2011 at 12:38 am
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