7 Ways Your Pawn Shop Can Utilize a Business Loan
In this post, we’ll share seven ways to use a business loan to support your pawn shop.
How to Spend Your Pawn Shop’s Business Loan
1. Purchase More Inventory
The obvious way that pawn shops make money is by purchasing inventory and selling it for a profit. Therefore, you’ll need to buy inventory to stock your shop. Estate sales are a great place to start! You buy a large volume of jewelry, art, clothing, and home goods at estate sales for a good price. Use your business loan to visit some sales and stock up on inventory that you wouldn’t be able to afford otherwise, so that customers have plenty of options to choose from when they come to your store.
2. Insure Your Inventory
While the amount of insurance you’ll need will vary based on numerous factors, all pawn shops should have some type of insurance coverage. This will protect your shop and the products you carry if items are stolen, your geographic area experiences a weather related-disaster, or you experience another type of issue covered by insurance.
Insurance is important for any business, but especially for pawn shops in which the merchandise can be valuable, expensive, or even impossible to replace.
3. Make More Collateral Loans
As you likely know, your pawn shop can sell inventory for a profit or make short term collateral loans to customers. Due to this, a business loan can provide the funds to back up those loans and can be helpful for new business owners who may not have the cash flow to provide collateral loans yet.
4. Upgrade Computers and Software
Staying organized as a business owner is key. One way to ensure that your operations run smoothly is to implement software designed specifically for pawn shops. You can use it for everything from keeping track of inventory to storing customers’ contact information. Although you might think that having up-to-date computers and software is expensive, having a loan will make it easier to afford these upgrades.
5. Open New Locations
If your pawn shop is successful, you might consider opening another location. You can use a tool like Pawn Guru to find out where other shops are located, to avoid being too close to competition. In addition, you can also use the site’s search tool to see which geographic areas don’t have pawn shops. A business loan can then provide the funding for renting the new space, hiring staff, and filling the shop with inventory.
6. Market Your Business
There are 9,650 pawn shops across the United States. That’s a lot of competition, so you’ll need to make sure that your shop stands out. With funding, you can find creative ways to show customers what merchandise you have to offer. For example, you can create business cards, build an online store, and publish sponsored social media posts. As you invest in different marketing efforts, be sure to monitor which strategies are generating the most sales, so that you know how to revise your marketing budget.
7. Hire Security
Any time you’re in the business of buying and selling expensive items, security should be a consideration. To keep your business safe, you might want to hire a full-time security guard to monitor the premises. If you don’t think this is necessary, you should still invest in a quality security system to protect your building.
How Will You Use Your Business Loan?
Pawn shops can be an exciting industry, and a profitable business venture for those who invest the necessary time and resources. A business loan can help you start a pawn shop or allow you to grow your existing operations. Take the first step toward making the most of this business opportunity by applying for a small business loan today!
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.