6 Tips When You Need a Collateral Business Loan

It’s a sad fact: If you own a small business and need a collateral loan, the bank probably won’t touch you with a ten-foot pole. You could go with a credit card or two until your revenue is where you want it, but that strategy is pretty risky. So, what’s an awesome small business like yours supposed to do? Hit your nearest pawn shop, of course.

Since When Did Pawn Shops Give Loans?

Whether you’ve had the opportunity to take advantage of pawn shop loans or not, they’ve always been around! Not only that but, compared to other loans like payday loans and title lenders, your friendly neighborhood pawn shop loan can cost you a lot less. When you’re a growing small business, it’s all about banking as much as you can. Of course, getting quick loans from a pawn shop is a lot different than going to the bank.

We’ll get into that in a bit but first, you might wonder why you’d even want to get a loan from a pawn shop. Well, there are tons of great reasons.

Why Bother Going to a Pawn Shop for a Loan?

You already read that pawn shops are the cheapest option when you need money, but there are plenty of other reasons to go there for your next business loan. For one thing, you won’t have to go through a credit check or even have a credit score to get one.

“So what?” you might say. Well, here’s what: If you end up not being able to settle that payday loan, you can expect a few hits to your credit score. You won’t have to go through any of that hassle with a pawn shop loan.

Another great thing about these loans is that by taking one out, you won’t have to spend the rest of your life in debt as you might with some other kinds of loans. Pawn shop loans happen to be heavily regulated, with each state having a cap on their interest rates. In New York, you’ll pay only 4% interest per month on instant cash loans.

You don’t need a bank account or proof of employment to get a collateral loan. It can’t get any easier than that.

Tip 1: Scrap the Stigma

The reality is that, from time to time, we all need some emergency cash—and, listen, if you have something that’s worth the kind of cash you need for your business, why just leave it sitting at home doing nothing when it could be working for you?

US 100 dollar bills

Tip 2: Know How It Works

Okay, so let’s start with the basics. In order to get a collateral loan, you need to have some kind of collateral, or one or more items that are worth the amount of money you want to borrow. So, what exactly can you bring to a pawn shop in exchange for cash? The short answer is pretty much anything with value.

Gold and silver, jewelry, computers, TVs, designer shoes, and musical instruments are just a few of the many things you can get cash for at a pawn shop. They’ll give you money in exchange for these items and let you come back to the shop later to get them back and pay off the loan. Usually, you’ll need to pay back the loan in 30, 60, or 90 days.

If you can’t pay the loan on time, you can try to arrange an extension or renewal with the pawn shop. If neither of these is possible, then the pawn shop assumes ownership of your item and sells it to recoup the cash they laid out for your loan.

Tip 3: Get More Money by Doing These Things

There are a few things you can do to get a better chance of getting more cash. Putting your items in their original packaging is always a good idea, and you also want to make sure you’ve got any instructions or certificates of authenticity that came with them, too. It can also help to have the original receipt, as you might be asked for it.

Before you pack up anything to take with you, take a good look at it. Could it use a bit of cleaning up? The cleaner and newer your items look, the more attractive they’ll look to a pawn shop and the more of a cash advance you might be able to get.

If you’re going to be selling electronics, you’ll also want to make sure they work properly as well as look good. This will save you a lot of time—and embarrassment—when you go into the shop.

Tip 4. Don’t Settle

When you bring in your item, it will be examined carefully to determine how much it’s worth. Then, the appraiser will make you an offer. The key to getting more cash is in not being afraid to ask if you could possibly get more for your item.

Of course, this won’t always work; there are lots of reasons that an appraiser will or won’t give a person more cash. The point here is that it doesn’t hurt to try. If you have something else you can bring to the table, this can also help you get more. Talk to the appraiser about how much more you might be able to get by bundling your stuff.

You can also try to ask them if there’s anything in particular they’re looking for. If they want it and you have it, this may give you the bargaining power to get more cash for your business loan.

Tip 5. Make Sure They Know Their Stuff

The pawn shop you go to for a loan should have the right kind of knowledge. If you’re bringing jewelry, make sure the shop is qualified to appraise it. They should have received training and have certificates posted from the Gemological Institute of America (GIA) and the Jewelers of America (JA). If they don’t, it’s time to walk.

male hand showing ok or confirm

Tip 6. Go to a Shop that Has It All

When it comes to pawn shops, you can never ask too many questions. Certification is a great thing, but so is experience. Whatever pawn shop you visit for a collateral loan, all the staff should have a great eye for all kinds of different quality items. The shop should have been in business for a while—long enough to have a great reputation in their area.

By the way, there’s no reason for you to have any kind of hard time when you walk in and try to get a secured personal loan. The pawn shop wants good stuff, and you want cash. If the items you bring in are worth it, you should always get a fair deal with no hoops to jump through. You also shouldn’t have to travel far to get to the place.

The shop probably has a website and, there, you can get a ton of info before you even walk through their doors. Check out their customer comments; you can also Google them to see if there are any reviews.

Social media is another great place to check. Customers are often more than happy to leave a good—or bad—review on a shop’s social media page. Even if you read a bad comment or two, the key is how the shop handles it. If they own up and try to make it right, you’ve found yourself a winner.

Get Your Collateral Business Loan at GEM

There are a ton of pawn shops in NYC, but they’re not all created equal. Don’t waste your time; go for one that checks all the boxes. GEM Pawnbrokers has 24 convenient locations in the city, plus we’ve been around for a long time—70 years, to be exact. We pay you the highest prices for all your stuff, and all our awesome staff is GIA and JA certified. You want collateral business loans? We give them. Instant cash loans, too.

Find out why small business owners love us; whether you want to buy or sell; give us a ring today: (718) 596-5626.

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