NEW YORK | Wed Feb 22, 2012 2:50pm EST
Feb 22 (Reuters) – Some U.S. pawnbrokers are taking liquid assets – literally.
Fine wines are among the items they will accept as collateral for loans, along with family jewels and fine art, as a practice common in Britain and France catches on across the Atlantic.
Liquidity issues, or a cash shortage, can be found on most rungs of the economic ladder, the pawnbrokers said.
“You’d be amazed by how many wealthy individuals have terrible credit ratings. And besides, if you go to a bank, it can take weeks or months to get a loan. When we make a loan, it’s usually the same day,” said Jordan Tabach-Bank, head of Beverly Loan Co.
In an office above a Bank of America Corp branch in Beverly Hills, California, home to some of Hollywood’s biggest stars, the pawnshop for the prosperous regularly lends to hedge-fund managers, bankers, lawyers, doctors – and occasionally to Oscar winners.
“Most people have a vision of pawn shops as sad sites. But that’s not the case here,” Tabach-Bank said. “I have a lot of people who come in who have a business opportunity and they need an infusion of cash for business purposes,” he said.
USGoldBuyers.com, an online pawnbroker with an office in New York City’s diamond district, will also accept fine wines as collateral, spokesman Jose Caba said. While the wealthy like their “expensive toys, unfortunately, sometimes they don’t have the liquid assets so to speak, to keep up their toys. That’s where we come in.”
“We don’t really want to sell the wine, or any asset that we take in whether it be gold or fine art,” Caba said. About 90 percent of the loans made have been repaid, he estimated.
Interest rates and length of the loans vary widely.
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