NEW YORK ( MainStreet) -- Pawning dad's gold watch or grandma's broach may not be the first thing that comes to mind when seeking financing for a business, but a growing number of small-business owners are turning to this option because of a lack of financing available elsewhere.
"The demand is getting stronger and stronger every day," says Todd Hills, CEO of Pawngo, an online pawn shop. "Small-business owners have a pretty direct plan: 'I need this money for X and this is how I am going to play it back.' Whereas a consumer comes to us because they've had some sort of unexpected life event happen."
|With the economy still struggling, more small-business owners are turning to pawning valuables to supplement cash flow. Pawngo offers an online pawn option.|
The company typically accepts small valuables and jewelry such as watches and gold coins in exchange for a three- to six-month loan.
Common uses for the money by small-business owners includes payroll, equipment purchases, repairs or to grow their businesses."In the past these business owners have had lines of credit, easy credit cards, home equity loans -- more formal banking relationships that with everything that has gone on with the economy, the credit is just incredibly tight and those options just aren't available," Hills says.