Thanks to traditional High Street lenders turning their backs on small businesses in the UK, tradesmen have been taking out short term loans in greater numbers from pawnbrokers and payday advance providers, industry experts report.
One of the nation’s largest pawnbrokers and instant cash loan providers, Albermarle & Bond, recently said that shopkeepers, decorators, painters, and white ban men were turning to pawnbroking services in increasing volume, eschewing their bank and instead pawning their watches and gold for quick loans.
In fact, such loans had increased by double over the past three years, according to Barry Stevenson, A&B’s chief executive. The firm’s own research found that around 38 per cent of the British population would consider turning to a payday lender or a pawnbroker for their financial needs.
According to historical statistics concerning pawnbroking use, only one out of 100 Brits have paid a visit to a pawnshop. However, one major online payday lender said that nearly half of its customers stated that payday lending was their ‘first choice’ for credit, while Mr Stevenson added that the number of Brits that have come to consider alternative forms of credit, such as pawnbroking and payday lending, has undergone a dramatic increase.
The chief executive remarked that people are no longer turning to friends, family, or the bank if they need help, such as a tradesman who’s on a job and the exhaust on their vehicle goes. Instead, more tradesmen have been turning to pawnbroking firms and payday lenders.
Half-year results for A&B demonstrated a 22 per cent increase in profits to the tune of around £36.5 million. Gold-buying and pawnbroking profits both rose over that same period of time, the results report.