Small business owners turn to pawn shops
Small business owners that are struggling to make ends meet sometimes need business loans – or a pawn shop. Pawn shop loans are now something that some business owners are turning to as a result of the tight economy and lack of lending.
Pawning is probably easier than getting a bank loan, though the interest rates may be significantly higher.
Pawn shops, including online pawn shop Pawngo.com, will evaluate your item, and e-mail you an offer about how much they are willing to loan you. If you are able to repay the loan, you will get your item back. If not, the pawn shop will keep it. Pawngo itself has loaned about $1.35 million in about 46 states, according to the company website.
Pawn shop owners say that the number one reason why small business owners tend to go into their office is because they want to have enough cash flow to pay their employees, reports CNN Money.
Maybe pawn shop loans could be a viable last resort for some companies. After all, if you need cash in a hurry, pawn shops can help you pay your employees and the bills so that the lights stay on in the office.
The problem is pawn shop loans are probably only a temporary fix. Business owners only have a certain number of assets, and unless the business turns around there will be no way to repay the loans or keep the business afloat. Especially because of the higher interest rates associated with pawn shops.
Businesses might also want to consider other options in lieu of pawning off their property – like looking to family or friends who might be willing to help out the business.
But for businesses, loans and pawn shops may short-term solution. At the very least, a pawn shop loan can help a struggling business stay afloat a little while longer – which may be all the business needs to recover.
Related FindLaw articles:
- Sources of Small Business Financing (FindLaw)
- Loan Delinquency During A Business Loan Credit Crunch (FindLaw’s Free Enterprise)
- Is a Small Bank Better for a Small Business? (FindLaw’s Free Enterprise)