What is a Pawn Shop?

You see them in the various parts of town and you have been wondering just exactly what is a pawn shop, how do they work and why are they becoming more common place? But you haven't asked.

Well, to answer your question, let's look at the history of pawn shops. Pawn shops date back to ancient times and are one of the earliest recorded lending institutions. During the late middle ages the House of Lombard in Europe had a group of pawn shops. The sign of the House of Lombard was the three golden balls and this sign was associated for years with the pawn industry.

The pawn industry came to America with the first settlers and in the early part of this century pawnbroking was regarded as the main source of consumer credit. With the rise of large consumer credit institutions, such as finance corporations, savings and loan associations, and credit unions, the pawn shop is no longer the major source of consumer credit. But the pawn shop still plays a vital role in the area of providing consumer credit.

The general public needs to borrow small sums of money that other sources are not willing to provide and this resulted in the rise of popularity of pawn shops. What chance do you think you would have in securing a $300.00 or smaller loan from a financial institution for a 30 to 90 day period? The cost of the paper work alone prohibits them from making such loans on a regular basis.

--taken from a pamphlet by Burrell Printing Co., Inc.