Rich people who want to fund new capitalistic ventures are using their fancy art collections and Rolexes for collateral at niche pawn shops that accept high end articles for easy, no-questions-asked, loans.
Such lending companies are riding the wave of affluent customers who don’t mind taking a quickie loan of a thousand to a million dollars using family heirlooms or a yacht riding at anchor for collateral. The National Pawnbrokers Association says that the average loan is around two-hundred dollars — so these new customers are an exception, but one that is growing by leaps and bounds as wealthy investors increasingly grow tired of jumping through hoops with regular banks to get a loan on a tip that promises a quick turnover of profit. Pawning the family silverware for a few thousand takes less than an hour, and the customer then has the cash in hand to invest in their hot tip.
Several pawnbroker companies have even launched online venues where they blithely accept the family jewels for a tenth of their value. The trick, as in all pawnshop transactions, is to make repayment as quickly as possible to redeem the indentured item. Most pawn shops usually give their clients a month to redeem their pledges without charging any interest — after that, the legal interest rate can be as high as 25 percent, compounded quarterly.