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Pawnshop

In: Business and Management

Submitted By Amiezuki
Words 255
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What is a pawnshop?

The pawnshop, consist of many intriguing parts of the entrepreneurial spirit, finance, sales, and money. The main reason a pawn shop is in existence is for helping the people who could not otherwise find or secure a loan for their needs at the time. Banks will loan money, but people with collateral that is not substantial or credit that is poor stand little chance of getting a bank loan, or securing a small cash loan for their needs at the time, this is where a pawn shop comes into play, the shop will loan based on the item being used for collateral and the sum of money needed, generally the loan period will vary based on the state that regulates the pawn shop. The customer has the choice of either selling the item or securing the loan for a period with interest being paid for the amount of time used, if the customer decides not to pick up the loan, the shop will then sell the item for an amount based on a used marketable price. The pawn shops deal in a win-win of high finance, the loans being given are high risk at times therefore the usury rate on the loans are generally at high interest amounts. Once the collateral has been fore-fitted by the customer it becomes the property of the pawnshop to sell to recoup their loan back plus a profit on top of the lost interest and this creates the revenue stream from sales.

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