Nestled in a quiet retail center long favored by high-income shoppers, the Gold and Diamond Center is a favorite source of diamond earrings, Rolex watches, gold trinkets and even the 5-carat sapphire engagement ring for Florida's former first lady. But these days the jewelry store is providing another surprising product: jewelry loans for those in need of quick cash.
Though it works with customers to ensure they don't miss interest payments and lose their collateral, it operates under the same premise as a pawnshop, charging 15 to 20 percent monthly interest. Yes, the same place where Charlie Crist bought a sapphire and diamond ring for his wife, Carole, is serving customers who are struggling to make ends meet.
Take in a $10,000 Rolex and get a loan the same day, then pay $2,000 a month in interest until you can repay the whole amount.
"Most of these customers just need a short-term loan while they are waiting for a house to sell or waiting for a check," said Coy Bentley, who started Northeast Jewelry Loans 16 months ago. He makes 10 to 15 loans a month through the new lending division of the Gold and Diamond Center, 222 37th Ave. N.
Hien Nguyen, Bentley's father and owner of the Gold and Diamond Center for 19 years, is quick to say Northeast Jewelry Loans is different from a typical pawnshop. If a payment is one day late at a typical pawnshop, the item goes up for sale. But Bentley calls clients when payments are late and gives them time to come in and pay or mail a check.
"Because of the economy, everybody needs money," Bentley said. "People were coming in and trying to sell their jewelry. You can tell when they really don't want to lose their mom's ring or a family heirloom. When I tell them I can give them a loan on it most of the time they get excited."
The customers who park in front of Publix or Stein Mart, just blocks from Coffee Pot Bayou, to get a loan aren't the typical pawnshop patrons who comfortably stroll past computers, guitars, lawn mowers and guns to hock valuables for cash.
"The economy is driving a lot of people into pawnshops that have never done business there before," said Tom Sams, chairman of the United Pawnbrokers Group of Florida. "Retired people are having problems because the investments they calculated to be partial payments to them along with Social Security have disappeared, and now they are pawning jewelry to make ends meet."
Northeast Jewelry Loans has clients of all ages, starting at about 25. The largest loan Bentley has made was $75,000 for a collection of watches. When the loan amount is that high, the interest rate may be brought down to 5 percent. The most he has loaned on an individual item was $20,000 on a high-end Rolex, the least, $50 on a bracelet.
Cappello & Co. jewelry at 428 Indian Rocks Road in Belleair Bluffs has been making loans on jewelry and other collateral for about three years, said owner Joe Cappello.
"We've had a license to do it for 15 years. We lent to pawnshops and (businesses) who were undercapitalized. With the downturn of the economy we started doing it to the public," he said.
The interest rate ranges between 2 percent and 20 percent a month, depending on the amount of the loan and the collateral. Cappello has made loans for $500 to $1 million. Along with fine jewelry, collateral so far includes boats, a plane, a Ferrari, a Bentley and a Picasso.
"The default rate is not that strong. It's probably running about 20 percent of what we do," Cappello said. "For most of the people it's a short-term fix for them. They find a way to get back in here and get it back. As long as it's done with dignity, it works for people."
Calls to five other jewelers in St. Petersburg, Largo and Clearwater found all of them still steadily buying gold and other jewelry, but none making loans.
"I see approximately 15 to 20 people per day," said Darren Delgado, the main buyer at Old Northeast Jewelers, 1131 Fourth St. N. "Some weekends, it's worse." Of those who come in to see what their jewelry is worth, about 80 to 90 percent end up selling.
Bentley is making more loans each month, not a sign of a recovering economy. The bright light, however, is he has had very few repeat customers.
News researcher Natalie Watson contributed to this report. To reach Katherine Snow Smith call (727) 893-8785 or e-mail firstname.lastname@example.org.