NEW YORK (CBSNewYork) — An old-fashioned way of scoring cash is making a comeback with a twist.
As CBS 2’s Maurice DuBois reported Tuesday, high-end, luxury pawn shops are popping up all over, offering loans on some very pricey items.
Michele Savoia loves his motorcycle and his 1958 Chris Craft, but he couldn’t afford both. So he came up with a plan to use his first love to help finance his new love and turned to a pawn shop looking for high-end items.
Tom McDermott, chief executive officer of Borro USA, says his company fills a lending void by providing low-interest collateral-based loans.
“The average person has accumulated – either directly or through inheritance – some assets. We offer them the opportunity to get a loan against it,” McDermott explained.
Assets such as diamond encrusted Tiffany bracelets, a signed Andy Warhol sketch, a Rolex watch, even an MTV Music Award, DuBois reported.
Jordan Tabach-Bank, CEO of New York Loan and Company, is a third-generation pawnbroker and says the pawn business is booming today because it’s so difficult and time-consuming for people to obtain traditional bank loans.
“Our loan process is just a matter of minutes. Our paperwork is one page. We do no perform credit checks,” Tabach-Bank said. “Unlike a bank, we do not ask what the money is for. We don’t access your new business venture.”
The ease and speed of the process has many people temporarily parting with some sentimental items. And believe it or not, experts say the rate of retrieval is as high as 95 percent, DuBois reported.
Savoia bought his boat and a short time later, after paying back the loan, was reunited with his bike. “I’m back in business and I own them all,” Savoia said.
If you’re curious about the interest rate on these loans, under New York State law, it cannot exceed 4 percent per month.
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