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Repossession of coins
gtstang
Posts: 1,699 ✭✭✭✭✭
I know collectors and dealers have taken loans and borrowed to buy high end coins. So, does anyone know of a coin that has been repossessed and the process taken to get it back?
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No, but...do you know what happens when your check does not clear on your exorcism?
You get repossessed.
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I pawned many coins for borrowers when I had the pawn shop.
Most redeemed. Some did not.
Sounds like the blackjack tables are a place you would lose less than this strategy.
I can remember a Kansas City coin dealer (a second generation guy, with a good reputation) who pledged his coin inventory and business chattels for loans to two different banks. When the two banks became aware of each other, one of them immediately sued the dealer for repayment in full (presumably the bank which sued found itself to be in the inferior position as to their lien on the collateral). The fellow couldn't come up with the repayment and the coin business folded in BK.
This was many years ago.
Nowadays, I don't think you would see too many such loans. The sensible banker would probably grant a coin guy a loan against some form of real estate which the dealer owned free and clear. Something like that. As long as the regular payments were made on that mortgage, the banker wouldn't inquire too closely. Bankers are kinda forced by numerous laws, rules, and regulations to treat coin guys and jewelry guys and automobile dealers with some heightened wariness. Everybody likes real estate collateral and tangible personal property is more difficult to borrow against.
As a collector, no coin is worth borrowing money for. Debt is a 4 letter word.
Some businesses make regular use of "factors." These brokers buy a business' accounts receivable paying a percentage of the account value. This give a merchant quick cash. The factor or broker then takes the full payment when due, or begins collection for late payers.
Banks are very reluctant to make loans against coins or other collectibles - too hard to value, track, and liquidate in case of foreclosure.
Credit card debt is unsecured.
Ive been tempted to add pawnbroker to the services at the shop. Higher dollar items, no SUV's or big screens though.
Secured lending covers a wide range of business transactions. Lenders who loan larger amounts prefer real property collateral for the primary reason that it is not portable. Coins, cars, fine art, etc. are portable and can disappear very quickly.
I do not borrow money for hobbies. My personal enjoyment is funded by cash... Whether it be a coin, a bottle of quality Cabernet Sauvignon or a fine pistol (all of which I have many excellent examples), I pay cash. Cheers, RickO