The 2007 financial crisis, which led to the weakening of global economies and the loss of 8 million jobs in 2008 and 2009 in the United States, tightened the availability of credit for consumers and small businesses.
Since the crisis, the unemployment rate in the United States has remained stubbornly high and the economic recovery has stalled, causing fiscal uncertainty to hit consumers’ pocketbooks and the balance sheets of small businesses.
In this new economic environment, consumers and small business owners have increasingly turned to nonbank sources of credit, such as collateral loans.
More Consumers Are Seeking Out Collateral Loans
Collateral lenders provide non-recourse cash loans against items individuals already own.
While retail and other sectors have suffered in the economic downturn, the collateral loan industry has thrived, giving people a low-hassle option for obtaining a line of credit.
Collateral loan businesses specializing in upscale merchandise are especially popular.
“We’ve seen a higher volume of business since the recession hit,” Tabach-Bank said. “People are looking for accessible lines of credit right now, and our confidential pawn loans appeal to them.”
The family-owned “pawn shop”, which opened in 1938, provides large collateral loans against fine jewelry, watches and artwork. The shop has been dubbed the “Pawn Shop to the Stars,” for its notable clientele and reputation of providing confidential loans.
New York Loan Company offer “pawn loans” against, purchases and sells luxury goods to the public at large from its discreet location on the third floor of the Bank of America building. Situated one block east of Rodeo Drive, Tabach-Bank’s shop embodies the high end of the collateral loan industry, an increasingly popular market as people seek out new and alternative lines of credit.
Collateral Loans Help Small Business Owners
Small business owners, finding it more and more difficult to obtain loans from banks, are using upscale collateral loans to meet payroll and answer other financial pressures. These pawn loans provide business owners a much needed cash infusion to keep their business operating and profitable.
Upscale collateral lenders, such as New York Loan Company, also enable new business owners to get their companies up and running. Would-be small business owners can present luxury items as collateral for a pawn loan to finance start-up expenses without impacting their credit.
New York Loan Company’s certified gemologists specialize in vintage and modern diamond jewelry, including signed pieced by Cartier and Tiffany and Co, as well as high-end watches, including Rolex and Patek Philippe. This New York institution also lends against other luxury items, including sterling silver flatware, Baccarat and Lalique crystal, as well as modern and contemporary art, including works by Warhol, Picasso, Hockney, Lichtenstein, Miro and Chagall. And, due to its unique 90210 location, New York Loan Company also provides pawn loans against entertainment and sports memorabilia, including awards, costumes, and championship rings and belts.
“We see all kinds of fascinating items come through our doors,” Tabach-Bank said.
But Tabach-Bank believes that it is more than the unique pawn loan offerings that keep clients coming back–it is the reliable and personable business model.
“People appreciate the confidentiality and consistency of our service,” he said. Pawn loan transactions are conducted in private offices, and valuables are kept in a secure bank vault.
“We’ve always offered something unique, and we continue to be recognized as the foremost collateral lender of luxury goods in the United States,” he said.
His shop has been written up in the New York Times, Los Angeles Times, The Wall Street Journal, and Newsweek, among other publications.