Small business owners find loan alternatives

9/21/2011

As small businesses struggle to survive during the down economy, many have been unable to secure bank loans from cautious lenders who fear another recession.

However, online pawn shops like Pawngo have succeeded in providing an alternative for small businesses to help cover payroll, additional inventory, unexpected damages and other necessities.

Pawngo recently announced its Small Business Lending Program, which requires monthly payments of approximately one-third less than banks. Small business owners can provide gold, jewelry, watches or other valuables as collateral to secure a loan.

"It became evident early on that there was a huge demand for our services," said Todd Hills, co-founder and CEO of Pawngo. "We are able to loan up to $1 million in less than 24 hours, which is simply not the way retail banks operate."

CNN Money reports that pawning is a less painful process for small businesses because there are no applications, credit checks or credit report risks if a default occurs. Many owners looking to fund expensive resources like payroll pawn off extremely pricy items. Ray Shaffman, salesman at Florida-based Gables Pawn and Jewelry, tells the news source he's seen people pawn Rolex, Cartier and Patek Philippe watches.