While the term "pawnshop" may conjure up images of seedy characters dumping their latest "acquisitions," that's not what the Beverly Loan Co. is all about. The Beverly Hills pawnshop has been giving short-term cash loans to many of Los Angeles' rich and famous for more than half a century discreetly and confidentially, of course. Louis Zimmelman opened the business in 1938 and today his daughters, Jean and Helaine Zimmelman, continue to loan money to the wealthy in exchange for high-value collateral. Unlike most pawnshops, Beverly Loan makes most of its money through interest payments on its loans, not on the sale of foreclosed collateral. Staff reporter Conor Dougherty talked with Jean Zimmelman about how the business works and why even the rich need some extra cash from time to time.
"There aren't any TVs or toasters here. It's just jewelry, silverware and occasionally a piece of fine art or crystal. We don't care about credit history; the entire loan is based on the collateral. It's a four-month loan and all the jewelry is stored downstairs in Bank of America's vault.
"After four months, the borrower can pay the interest and extend the loan, or they can (repay the loan principal, plus interest, and) pick their item up. About 85 percent of our customers pay back their loans. If they don't come to pick up their property after four months, we send them a notice of foreclosure (after two more weeks have passed), which is specified by law. The person then has to either pay the interest and extend the loan, or redeem the property. We never want to foreclose on anyone. That means you'll lose a customer.
"We've had some wonderful pieces of art. We've had Picassos and Warhols. We've had everything from gold teeth to a diamond-encrusted knife.
"What makes the business interesting is we don't ask our customers any questions, but they usually tell us why they're borrowing the money. A lot of times people don't want the bank to know that they're borrowing money. They would rather just do it this way because it's totally confidential, and no credit report is made, even if you forfeit the loan.
"We sell unredeemed property, as well as property that we purchase. The jewelry is sold as wholesale prices. It's probably one-third what you would pay retail. We have a very nice showroom and we sell to the general public, as well as dealers."
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