NEW YORK — Walk into the Suttons & Robertsons showroom on the East Side of Manhattan and it looks like any other high-end retailer or auction house: necklaces glitter with diamonds, sapphires and emeralds fill display cases, and sterling silver knives, forks, and spoons sit on a wooden table fit for a monarch. In the private room in back are bigger, shinier versions of the jewels out front.
High on the wall is a coat of arms bearing the likenesses of two lions, with the date of the company’s founding underneath: 1770. Only on closer inspection does it become clear that between the lions are three balls dangling from a hook — the international symbol for a pawnbroker.
“We focus on the blue-chip, wealthy crowd,” said Jeffrey A. Weiss, CEO of Suttons & Robertsons, which is preparing to open its first New York store.
It has come to the United States to fill what it says is a growing need among the wealthy who have spent beyond their means and need a quick — and quiet — infusion of cash.
“There are more and more people who are asset-rich and have a temporary liquidity problem,” said Weiss, 70, who retains the soft Brooklyn accent of his youth. “They’re cash constrained. We have the capital to lend up to and beyond $1 million.”
Suttons & Robertsons is not alone in the high-value niche.
Websites like Pawngo and Borro sprang up after the financial crash, offering to lend against jewelry, watches, and pretty much any expensive item that can be shipped via FedEx. Ultrapawn and iPawn came later with the idea of making larger loans, secured by fancy cars, art, and gems. Recently, Beverly Loan Co., a Beverly Hills, Calif., pawnshop, opened New York Loan Co. in Manhattan’s diamond district.
Weiss made a fortune running DFC Global, which operates payday lenders and pawnshops in 10 countries. In the United States, it does business as Money Mart and the Check Cashing Store.
Tight credit makes the timing right for the New York move, he said. “Certainly conventional lenders over the past five to six years have become increasingly reluctant to advance credit on all fronts,” he said. “You can walk into our location in New York and walk out with your funds in an hour or two.”
For a fee — a high one — of course. For those who borrow a couple of thousand dollars against, say, a Rolex, rates range from 12 percent to more than 60 percent on an annualized basis for online pawnshops and into triple digits for brick-and-mortar operations.
Typically, a person pawning an item must to leave it with the pawnshop and make the monthly interest payments to keep the loan current. To get the item back, the customer must pay the principle and all the interest. Customers missing any interest payments could forfeit the item.
The new wave of pawnbrokers, or collateralized lenders, as they like to be known, isn’t just betting that people will pledge cars, planes, or, in the case of one Ultrapawn customer, an earth mover. They are betting that as long as traditional bank lending remains tight for individuals, there will be repeat customers.
The high-end portion of the industry is betting that with comparatively lower pawn rates and an ability to fulfill even large loan requests in a day or two, it will be able to build its business on happy repeat customers.
Paul Aitken, founder and CEO of Borro, attributed repeat business to the human desire to spend today without thinking about tomorrow.
“Entrepreneurial people like to do things on the spur of the moment, and they’re probably not the best planners,” he said.