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High-class pawnshops? Bring your Maserati

Pawn shop sale
Loan officer and salesman Roy Knudsen, of Boston, left, displays earrings to Doreena Ruiz, of Framingham, Mass., as Ruiz shops at Suffolk Jewelers & Pawnbrokers, in Boston.Steven Senne / AP

Instead of velvet Elvis paintings and iron bars, new high end pawnshops catering to an upscale clientele feature borrowed Andy Warhols and sweeping views of Manhattan, the Journal reports.

They come bearing Maseratis, Baccarat chandeliers, 16-inch bronze busts - even a pair of Houdini's handcuffs. Just like regular pawnbrokers, these higher-end clientele are putting up stuff they own for a short term cash loan and paying 48 percent -240 percent in annual interest. But instead of the $150 average loan seen in a typical pawnshop, according to the National Association of Pawnbrokers, these are for $10,000-$15,000.

There are other divergences too.

"Paying rent" and "getting gas" are among the top reasons for going with a traditional pawnbroker. For high-end collateral lenders, reasons can include "funding a charity event," "starting a new pop-up shop," and "paying off gambling debts."

A different sort of person walks through the door as well, which itself might be made of glass and located on the upper floor of a high-rise, rather than made of steel and found in a strip mall on the edge of town.

The average pawnshop customer is a 39-year old making $29,000 a year, according to the National Pawnbroker's Association, but the high-end shops cater to folks like non-profit directors, high-end gamblers, and small business owners.

The one thing that's the same is the interest rate charged. Depending on a state's laws, it can go beyond 200 percent. Compare that to the 5.4 percent average interest rate for a conventional bank loan paid by small-business borrowers in August, according to the National Federation of Independent Businesses. But with banks still skittish about opening credit lines, for some it's also the only loan they can get. Just like at a regular pawnbrokers.

Maybe the wealthier aren't so different after all, it's just their pawnbrokers have better offices.