It is no secret today that times are tough. The bottom has dropped out of the housing market, jobs are being cut, the economy is struggling and credit is hard to come by. So, what do you do if you are a small business owner and you need a loan? The secret weapon that many have discovered may surprise you… look to a pawn shop!
At the present time, getting a loan from a pawn shop is easier than getting a bank loan. Traditional institutions have much higher conditions set on their lending. Many small business owners cannot meet the higher standards that are being set to attain a loan. So they need to seek alternate avenues to secure the money they need.
There are many different reasons that small business owners look to pawn shops for loans. Some use the money for start up costs of a new business. However, this is a smaller percentage of those that get loans. Most need the money to get through a rough patch. Whether it be paying their employee payroll, paying off their quarterly taxes, staying ahead of bills or just reinvesting in their company, the money gets them through a tough spot long enough to get back on their feet.
The allure of using a pawn shop is obvious for many small business owners. Unlike banks, pawn shops provide collateral loans without the hassle of applications, credit checks or the risk of overextending credit lines. Borrowers do not have the risk of bankruptcy if they default on their loan. Their credit rating will be unaffected.
Pawning is only a temporary solution to a larger problem and business owners need to keep that in mind. Most people do not have an unlimited amount of assets to pawn. There are also usually higher interest rates to contend with when using a pawn shop. And finally, if a person cannot repay the loan, then they lose their belongings. However, when faced with the possibility of losing their business all together, it is wonderful to have another place to go when all of the traditional options have failed.
The main goal of any struggling business owner looking to use a pawn shop should be to get the money, use it to better their business, make it grow and get back onto the road to profit. The loans that pawn shops offer can help a struggling business stay afloat a little while longer – which may be all the business needs to recover.