Pawn Shops - the New Banking Alternative - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

Pawn Shops - the New Banking Alternative

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When you think of pawn shops you probably think deals on jewelry, musical instruments and equipment. And you probably think short-term loans. But more and more small businesses are taking pawn shops up on those short-term loans to make payroll. 

That's right, pawn shops are becoming the new alternative to conventional banking for some small businesses.

"We've seen quite an increase in those short-term loans for small businesses. Banks are getting tighter and tighter on their restrictions and just aren't loaning money. And those who need it for just a few days are coming here instead. That business really has increased quite a lot of us," says Will Adams, General Manager of Palace Jewelry and Loan in downtown Reno.

The pawn shop takes in everything to secure loans - to rings to vehicles.

"We don't report the loans like the banks do so there isn't any impact on credit reports," Adams says. "And we are seeing more and more small business owners coming in on a regular basis....taking out money and then picking up their collateral in just a matter of days. It helps them keep business flowing."

Nevada pawn shops can charge up to 13% - which is a lot higher than federal money right now. But the ease makes it an attractive alternative for some. And pawn shops are hoping the business they build up now will carry over even if and when the economy turns around.

Written by Erin Breen

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