The question is, is the UK anywhere near to coming out of the recession at all? If you turn to the recent short term loans companies who’ve been making front page news recently, you’d have to suggest not.
When you factor in the growing success of pawnbrokers – once seen as a last resort for the utterly needy – you would have to surmise that, if anything, the average man on the street is worse off than at any time I can certainly remember in the forty or so years I’ve been on this marble.
Following the announcement earlier this week that Albemarle and Bond, the pawnbroker, gold-buyer and short term loans specialist, are on track with their five year plan and roughly a quarter of their way through a two-year High Street expansion of fifty further store fronts, The Money Shop are following suit.
The pawnbroking chain already have twenty shops north of the border and they’re looking to increase their presence by sixty percent. This is as a direct result of recent successful trading, releasing figures last month that indicate eighty percent of those placing their security ‘in hock’ are indeed coming back to retrieve their goods within the allotted time – very much the footfall equivalent to the instant cash loan.
The line between the pawnbroker and online lender is getting slimmer all the time, the two main differences being that online short term loans lenders use pay-cheques as collateral and have their counters on the Internet whereas the pawnbroker still maintains a very tangible presence with collateral that is growing in value as the months pass.
As living, breathing proof of this, borro.com are expecting their average customer spend to increase from £4,600 per annum to £5,000 in 2012.
Artefacts individuals have invested in over the years, perhaps from equity raised when house prices were booming, is seeing customers with valuable individual items to place as security, which is one reason the pawnbroker predicts this average £400 per customer per year rise.
It is worth mentioning that borro.com do target the more well-off customer with higher value loans and householders with expensive items who are struggling to find credit elsewhere are able to secure such no credit check loans with their high-value commodities, according to the company’s CEO, Paul Aitken.
Another Scottish pawnbroker, Duncanson & Edwards, also issues larger loans; in their 180 year history they have lent on everything from bullion and precious gem stone rings to the latter-day electrical goods and instruments. However, its terms cannot be termed in the usual pay day loan manner, as they will hold on to some of their articles for up to seven months.
The advantage borro.com has is its online facility. There are still a huge amount of businesses, especially sole traders and smaller concerns, teetering on the in Scotland. Rather than suffer the ignominy of walking through a shop door with a prized asset it is preferable to borrow a quick cash advance online and suffer a slightly higher interest rate.
Things must be bad if a Scot is willing to pay higher rates, eh? No further questions, yuh rona!