While there may be no such thing as a recession proof industry, the pawn industry seems to be the closest thing to it. Pawn shops provide a valuable service to people who need short term money loans. As a result, they are often a viable alternative to getting a loan from a bank.
Many people don’t have good credit, but most people can find a few items of value around their homes that they can easily part with to use as collateral for their loan from a pawn shop. Therefore, it’s no surprise that the pawn shop industry in the United States is growing. As of 2012, there were over 11,000 pawn shops, making it worth $14.5 billion.
This number appears to be positioned to grow as the industry grows. It’s not surprising that more and more pawn shops are popping up. After all, it is difficult to find an industry that can weather tough financial times. Pawn shops provide people short term loans in small amounts of money. This is something that banks don’t offer. As a result, pawn shops are often a great resource for people who are struggling with an economic downturn or simply need to pay for an unexpected expense.
During the 2008 recession, the average loan nationally went from $80 in 2008 to $100 in 2009. At the same time, pawn shops experienced a decline in their retail sales. So while pawn shops are able to weather tough economic times better than many businesses, they are affected.
Still, the U.S. pawn industry is likely to grow as the demand for short term, small cash loans is not going to go away any time soon. Many people across the country are finding it difficult to make ends meet and a loan from a pawn shop is often the best solution to avoid falling into debt. Even people who aren’t struggling financially are avoiding bank loans and making purchases more carefully. A pawn shop is a great place to find deals on all sorts of things people may need for around their home.