definition from Merriam-Webster dictionary
- 1 : something delivered to or deposited with another as security for a loan
- 2 : the state of being pledged
- 3 : something used as a pledge : guaranty
- 4 : the act of pawning
Origin of PAWN
Middle English paun, from Middle French dialect (Walloon, Flanders) pan
First Known Use: 15th century
definition from Wikipedia.org
A pawnbroker is an individual or business (pawnshop or pawn shop) that offers secured loans to people, with items of personal property used as collateral. The word pawn is derived from the Latin pignus, for pledge, and the items having been pawned to the broker are themselves called pledges or pawns, or simply the collateral.
If an item is pawned for a loan, within a certain contractual period of time the pawner may purchase it back for the amount of the loan plus some agreed-upon amount for interest. The amount of time, and rate of interest, is governed by law or by the pawnbroker’s policies. If the loan is not paid (or extended, if applicable) within the time period, the pawned item will be offered for sale by the pawnbroker/secondhand dealer. Unlike other lenders, the pawnbroker does not report the defaulted loan on the customer’s credit report, since the pawnbroker has physical possession of the item
THE HISTORY OF PAWNBROKERS
Throughout history, pawnbrokers have existed providing monetary loans in exchange for collateral. Documented evidence traces “Pawnbroking” or the act of lending money back to ancient China over 3000 years ago. They began in China as a way of granting short-term loans to the peasants.
We also know, pawnbroking existed in the Ancient Greek and Roman Empires, where it thrived, offering merchants the ability to get small shops off the ground. In Europe during the 14th and 15th centuries, the pawnbroker provided the short-term means necessary to finance business endeavors and aided to the poor in granting temporary loans. Pawn shops are often referred to as the “Lombard” in Europe, in reference to the House of Lombard, a prominent lending family in medieval London.
In 1388, as a method to help finance the war against France, England’s King Edward III famously pawned his jewels to the Lombards. And Queen Isabella of Spain is said to have pawned her crown jewels in order to fund Christopher Columbus’ expeditions to the New World. Had the queen not done so, our history may have been a lot different.
During the 19th century, a popular method for the poor to make it through the week, was by pawning clothes on Monday and retrieving them on Friday,“payday”. During the Great Depression, while banks were failing and most Americans were trying to survive, pawn shops were among the only institutions lending money.
THE PAWNBROKERS SYMBOL
The symbol of the pawnbroker is represented by three spheres suspended from a bar. This symbol goes back to the Medici Family of Italy, and its symbolic meaning of Lombard, where pawn shop banking originated. The three balls or globes later became part of their family crest, and as an indication of its business. Later Lombard merchants would hang the spheres from their doors to indicate their business.
Over time many financial lenders came to know of the fame and fortune of the Medici family and adopted their family emblem (the three gold balls) as their own, in hopes of similar success. The three balls became a worldwide symbol of money lenders, now known as “pawnbrokers”.
The patron saint of pawnbrokers, Saint Nicolas has also been associated to the symbol when he provided a gift of three bags of coins to the three daughters of a poor man so that they could marry.