32: Run Every Penny Through The Business with Jordan Tabach-Bank

May 23, 2018

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Yigal Adato: 00:03 Hey everyone, my name is Yigal Adato and this is the Pawn Leaders Podcast, a podcast to help you make more money, stress less, and live an epic life all while working at the pawnshop. Hey pawn family, welcome back to another episode of the Pawn Leaders Podcast. Thank you so much for joining us. Today’s guest is Jordan Tabach-Bank, who’s a third generation owner and CEO of Beverly Loan Company an upscale pawnshop who’s specializes in discrete collateral loans against fine jewelry, watches art work and memorabilia. This pawnshop to the stars caters to socialites, business people and celebrities who require collateral loans against their prized possessions in a confidential office building. In 2013 Jordan founded New York Loan Company an East Coast sister operation and most recently Jordan purchased the oldest pawnshop in the United States Chicago Loan Company. Jordan is a graduate of the University of Michigan and Loyola law school is a member of the of the state bar of California and sits on the board of directors of the national pawnbrokers association. Jordan, welcome to the show, brother.


Jordan Tabach: 01:12 Thanks for having me.


Yigal Adato: 01:13 Nah, man, it’s a pleasure. I’ve known you for a long time. I’ve been trying to get you on the show. You’re a busy, busy man, so thanks for taking the time to front of the beyond.


Jordan Tabach: 01:27 No, I appreciate the opportunity. Let’s forward to chatting pawn with you.


Yigal Adato: 01:27 Nice brother. So tell me, I know you’re a third generation pawnbroker and your bio says that you’re a lawyer. So tell me how your family got into the pawn business and then what made you decide instead of doing law, going into the family business?


Jordan Tabach: 01:41 Yeah, so you nailed it. I’m a third generation pawnbroker. My grandfather on my mother’s side founded the business in 1938, the Beverly Hills operation and then it became my mother’s shop there after, she had worked there and when he passed away, she took the role of heading up the company and I had like so many other people in this multi generational industry we find ourselves in. I had worked at the pawnshop during summers growing up. And then in [Incomprehensible] after college I worked at the pawn shop and then I went off to law school. And after law school, I briefly worked for a real estate company and I found myself working in the evenings doing what else? Working on the pawnshop. And unfortunately around that time I lost my mother who was our leader. And I had a choice to make. Did I want to do boiler plate lease agreements and purchase and sale agreements and read loan documents or did I want to see beautiful jewelry and our work and deal with an amazing customers and be in the pawn industry and it was a no brainer. I took the ladder


Yigal Adato: 03:11 Nice! You’re running the company for how long now?


Jordan Tabach: 03:30 I’ve been officially the CEO since 2005.


Yigal Adato: 03:30 Nice. So, we met awhile back at the California Pawnbrokers Association and we get to talking we had very different stories you and I. My was high volume, low pawn dollar. Your’s was less volume, high pawn dollar. Was it always like that or did it kind of morph into this because you wanted it to go that way?


Jordan Tabach: 03:47 No, interestingly enough, the vision was always to have a office building location and when you’re not street level, you find yourselves doing less volume and when you focus on higher dollar loans of course you’re going to do less volume, it’s obviously my goal to grow the volume, but seeing that we are doing the higher dollar loans and we don’t do hard goods or electronics of any kind or musical instruments or anything of that nature by virtue of that we are going to be slightly lower volume. And that was sort of always the vision and we carried that vision into New York and then to Chicago. And then we do have a sort of more traditional, street front pawnshop located in Costa Mesa, California, where we do have more volume and it is sort of, it allowed me to live a little a bit, you got a lifestyle of hey, here’s you know, in everyday pawnshop sort of operates, which has been fun for me.


Yigal Adato: 04:54 Nice, so just so that the people know, you’re in California, New York and Chicago what are the interest rate and the hold periods for loans in those states?


Jordan Tabach: 05:06 Sure. New York and California are a lot of like they are more or less low what we could, would consider on a national level low interest state, Chicago is also a low interest state with the ability to charge a lot more in fees. The way we operate is that we are pretty standard at about 4% a month for all of our loans across the board.


Yigal Adato: 05:37 Got It. So, it’s a low interest state. I know it, I know it well. I Was in California. What type of items do you take in, every time we would meet at a conference, I would always ask you, I’d be like, Hey Jordan what did you taken now? Because I would see gold teeth and iPads and you would see different stuff. What are the types of things that you’re taking in these days?


Jordan Tabach: 06:12 The vast majority of what we see is jewelry and fine watches and a lot of art work as well, particularly in our New York location where art work has just about equal. The percentage of our loan balance that’s jewelry and watches. But that Jewelry and watches are always the bread and butter. Sure, and then of course what’s exciting for me is the really high end goods that we’ve had the opportunity to lend against. For instance, we’ve made loans against GIA certified red diamond. Red Diamonds can go for $1 million a carat. I mean there are every now and again then Does exciting the exciting collateral that you don’t see unfortunately on a daily basis. But yeah. Bread and butter, like so many pawn shops is gold. And why is gold the best collateral you can possibly have is because it has intrinsic value. You can always melt gold.



Jordan Tabach: 07:16 You got It.


Yigal Adato: 07:26 So, question for you Jordan. What’s been the toughest thing Growing these stores for you?


Jordan Tabach: 07:31 I’m a glutton for [Incomprehensible] so opening stores, 3000 miles apart from one another is not an easy task and a lot of frequent flyer miles. We have managed to build a well oiled machine. I replicated the Beverly loan model in New York and now in Chicago. And it’s a model that works. It’s Private offices, confidentiality, security, safety, not just of our employees but of our clients and of their collateral. We don’t name names. Everything is stored in bank vaults, security. Our goal is to make our clients feel very comfortable with the transaction. One thing I say is, you know, there’s a stigma attached to our industry and it’s my goal to de bunk that stigma and what I tell my clients when they’re feeling uncomfortable. If you have a beautiful home, correct? Yeah, I do in Beverly Hills, I’m like, do you have a mortgage against that home? Of course I do. Are you embarrassed about that mortgage? No, I’m not embarrassed at all. Then why would you be embarrassed about the loan against your five, 10 carat diamond ring?


Yigal Adato: 08:55 Well said.


Jordan Tabach: 08:55 Frankly, what’s the difference? And usually when I couch in those terms, you know, my client tell’s feels a lot more comfortable.


Yigal Adato: 08:59 So let me ask you this. A lot of people who listen to the show ar mom and pop shops, they’ve got one or two stores, they’re dealing with the average loan of $50 75 or a hundred dollars but you’re dealing with people who are taking loans off of a red diamond or these fine art works. So I’m going to ask you this question. It may sound a little bit naive. When do people with money need money?


Jordan Tabach: 09:22 That’s a great question and I get asked that question often I don’t know if you’ve ever tried to secure a loan from a bank but it is not an easy process. They need personal financial statements, they review financial statements, they need everything about you. They need your blood type and it takes time. And the loan documents are not boiler plate and it has to go to loan committee. So a lot of people, when they need access to quick cash and all of their capital is tied up in investments and in homes and cars and in other sort of opportunities. But something comes their way and they need access to quick cash. We are the quickest game in town. We have the unique ability to lend a $1,000 a $100,000 and even $1 million in literally a matter of minutes. If the collateral is correct, if the collateral speaks for itself. And of course Yigal one more thing, there are plenty of people in this town in Beverly Hills, in New York who have poor credits but have a lot of money and because they have poor credit, they can’t even access a credit card. Wow. But do you know if they do have, they have a lot of property and a lot of tangible personal property that they can leverage into a quick loan


Yigal Adato: 10:51 I guess what I’m hearing is, if you have this street pawnshop let’s say, don’t disqualify people who would need large loans and maybe try to connect with a community that has it with the business association, you might score a big loan from there, a $10,000 loan, $20,000 loan because they might need some quick cash. I remember a guy walked in, Jordan and he had like two three carat diamonds and he needed, you know, 15 or 20 k to pay payroll. And we helped them out really quick and he was a business owner. And when he walked out my brother are like, all right, like this can work. And so we started going after some of those bigger loans that it increased our loan balance.


Jordan Tabach: 11:37 Yeah, I encourage people to go after the larger loans. And If they can borrow funds even from friends or from family they are probably charging more on loan interest than what they’re borrowing and they can pick up that spread. And even if that spread is thin, it’s money in the bank. And so I’d say you can’t be scared to write that large loan. Be it, make sure that you authenticate the collateral appropriately and you value it appropriately.


Yigal Adato: 12:18 And so, what’s been the most unique item that you’ve taken in that you can mention cause I know that you are all about privacy. What’s been like a unique item that still to this day you remember?


Jordan Tabach: 12:28 Yes. Some of the most unique items are not the items I’m frankly most excited about. For instance we made a loan against a collection of wine, chateau pet truths and Domaine de la Romanee Conti, DRC. These are bottles of wine that are over $5,000 a bottle. And we had a few cases of them and that’s not the kind of alcohol I drink, but that’s what we call an opportunity we did our homework, we were able to make the loan. And what we figure is we advertise those sorts of loans even though it isn’t our every day because anyone who has that sort of collection probably all also has a Rolex watch probably also as a diamond. So sometimes we even use other forms of collateral as a loss leader to get in what that which we do best.


Yigal Adato: 13:38 So, and remember like when we talk about unique items, you also kind of have your own personal brand. I remember years ago, you’re on a TV show, what was the name of that?


Jordan Tabach: 13:45 Final Offer.


Yigal Adato: 13:49 Final Offer, I love that.


Jordan Tabach: 13:49 My 15 minutes of fame.


Yigal Adato: 13:49 What?


Jordan Tabach: 13:51 My 15 minutes of fame.


Yigal Adato: 13:55 Your 15 minutes of fame, no. You were a pawnbroker on TV and you knew your stuff and I think you gave a great name to the industry. What makes you so involved In the industry today. You’re part of the NPA, you’ve been on the news like CNN talking about the industry. What makes you so involved and why do you think it’s important for people to get involved?


Jordan Tabach: 14:16 I had mentioned it earlier. I think it’s important to get rid of the stigma that’s associated with pawn, that is a low end thing for low class people. It’s an opportunity to utilize your tangible personal property and lend against it. It is an opportunity to engage in loan that is non recourse, that’s not going to affect your livelihood, that’s not going to affect your credit. And I think the NPA in particular does a great job of conveying that to lawmakers on Capitol Hill. So I encourage people to join their association and joining State Associations like CAPA and I’m a huge proponent of the industry. The industries have been very good to me and I think it’s important that I give back.


Yigal Adato: 15:22 Love it men. Now what is some of your keys to success from opening the shops and buying the stores that you have seen over the years were you’ve been able to replicate and say, okay, these are the same things I need to put into all my stores when it comes to either, and I’ll give you like a wide array of things either like marketing or leadership. Where you say these are the things that every store should have. So they’re successful for myself. And I know that your stores are a little bit different than the regular stores, but what are some of those success tips that you can give other pawnbrokers?


Jordan Tabach: 15:57 Okay, I’ll [Incomprehensible] One is hire the best and the brightest, we typically hire gemologist, GGs from GIA directly from GIA. We want people who know their stuff. And the way I think about it is even if I’m going to pay someone more because they have that degree, if they catch one big diamond right or one fake Rolex, it could probably pay for the difference between hiring them and hiring someone who does not have that background. So I’ve been a proponent of hiring the right people and compensating them well. I think at every location I have a loan first mentality. A lot of places want the quick turn, they want to buy something and flip it and make a quick profit. At the end of the day pawnbrokers make the most money when they have a nice full vault, full of a safe, secure loans for which people are paying interest. It’s the kind of make money while you sleep mentality. One thing that I’ve always, in all of my businesses confidentiality, unfortunately there is that stigma associated with pawn and frankly it’s none of anyone’s business if you’re getting loan. So we don’t talk about our clients, we don’t talk about their collateral. And the final thing that I think perhaps is most important is we run every single solitary penny through the company. And why is that important? Because we have very clean books and clean books allow you to secure a line of credit with a bank. And once you have a line of credit with the bank and you have access to money, it allows you to write the larger loans and it allows you to have those expansion opportunities. And it’s the very thing that allowed us to go to New York and Chicago and purchase a pawnshop an existing pawnshop in Costa Mesa. So, really as enticing as it may be to pocket some cash here and there. I say, no, no, no.


Yigal Adato: 18:11 Man that last one it’s home for me. My father always said, Yigal do business right, pay your tax so you can sleep at night. But what it caused us, it caused for my brother to be able to buy our building and have that clothes shopping center and get lines of credit and borrow money from friends and family to do more loans. So that’s what helped us grow. So I love, love that last one man, which is run every penny through the business. I agree. I think the old mentality is pocket some cash. And I think the other part about that, Jordan, is that you can’t grow to more team members if you’re not running every penny through the business because you’re afraid that, well, if I’m bargaining cash, I’m not ready to the business, what if they steal from me? What are they seeing as opposed to everything’s on the books. Every penny’s through there, every items in inventory. You agree with that?


Jordan Tabach: 19:07 I agree, totally. And your employees know if you’re pocketing something or if you’re taking home merchandise and it sets a bad precedent, I just think-


Yigal Adato: 19:20 Especially if they walk up to you and say that they want to raise and you come back and you say, I can’t afford it right now. You know


Jordan Tabach: 19:31 A 100%, 100% that you can’t afford it, I just saw you stick a lot of cash in your pocket.


Yigal Adato: 19:37 True. I agree man. So just a kind of review, hire the best talent, compensate well, the loan first mentality, I’ve talked to so many people that loan less because they want to flip it for more. So that’s brilliant key, confidentiality which I’m guessing you’ve had some high profile people walk into your locations. So confidentiality is extremely important to them. And the last which is run every penny’s through the business. I think it’s, I’ve had 28 episodes so far, and that’s one of the best pieces of advice anybody said. So thank you for that.


Jordan Tabach: 20:16 You’re welcome. And if I add one more don’t be scared to take on new forms of collateral. Don’t be scared to take on things that you don’t know a lot about. Educate yourself, it’s a constant, you know, one of the fun parts about this business is things evolve and trends of all. Then you gotta stay on point and stay on the Casa of technology and everything else. Say it’s just wild. I mean, there are new treatments to stones and diamonds and colors stone, then you have to move with the time. And don’t be scared to write that large loan and even make loans to the trade. You know, we deal with the vendors of all kinds and sometimes the vendors are in need of money, make loans to the trade as well. Try and explore every opportunity.


Yigal Adato: 21:16 Love that man. So, let’s talk about those trends, I’m just kind of close at interview you’re at the board of the NPA you kind of had your finger on the pulse where do you think the pawn industry is going in the next couple of years with all these online stores popping up, some online pawnshops here and there. What do you think is next for the pawn industry?


Jordan Tabach: 21:37 Online pawn is an interesting topic and it’s a debate taking off my pawnbroker hat and putting on my lawyer hat. And I’ve talked to people who are far more qualified than myself who some who have said it is, there are arguments to be made for the legality of online pawn and others who have said don’t touch it, don’t touch it. And what I have found is whether legal or not, I like having a client in my office. I like having my clients come in to make their payment in person and not pay mobily. Why? Because they can look in the showcase or they can make another loan or they can buy something or they can sell something and it’s the opportunity to do more business. And it’s the opportunity to breed trust with your customer and develop relationships. So in my personal opinion, face to face contacts, it’s crucial and of the utmost importance.


Yigal Adato: 22:39 Love it man. Jordan I want to thank you again, I know you’re a busy guy flying across the country. Thank you so much for being on the show and dropping some words of wisdom to the pawn family.


Jordan Tabach: 22:40 Thanks for having me. And I really think this show is awesome and you’re doing great things for the industry and can be proud of you man.


Yigal Adato: 23:00 Thank you, brother and for those of you listening if you’re not in the Pawn Leaders Podcast Community on Facebook just search Pawn Leaders Podcast it’ll come up, join us. We have conversation everyday about how to improve your store, how to improve your leadership, your sales, and everything in between. And I look forward to see you guys in the next podcast.



A 3rd generation pawnbroker, Jordan is the CEO and owner of Beverly Loan Company, an upscale pawnshop specializing in discreet collateral loans against fine jewelry, watches, artwork and memorabilia. This pawnshop caters to socialites, business people and celebrities who require collateral loans against their prized possessions, in a confidential office building. In 2013, Jordan founded New York Loan Company, and most recently, purchased Chicago Loan Company. Jordan is a graduate of the University of Michigan and Loyola Law School, a member of the State Bar of California and sits on the Board of Directors of the National Pawnbrokers Association.



[01:46] Jordan’s grandfather started the business in 1938, who later gave his mother the business. When his mother passed on, Jordan decided to take up the mantle.



[05:25] Beverly Loan Company charges a standard of 4% a month



[06:04] Most of the items pawned includes jewelry, fine watches and artwork, especially at the New York location



[07:33] What’s been the hardest part of running the stores? “Opening stores 3000 miles apart from one another is not an easy task”



[08:24] “There’s a stigma attached to our industry, and it’s my goal to debunk that stigma”



[09:51] When do people with money need money? There are times when persons’ capital are tied up in investments and big properties. There are also people with poor credit, but have a lot of money in properties that need personal loans



[15:35] One of the most unique items Jordan has seen was an expensive wine collection



[14:17] What makes you so involved in the industry and why is it important for people to be as involved? It’s important to dispel the stigma that pawn is for low class people and the NPA does a great job of conveying this



[15:55] Success tips for pawnbrokers:

  1. Hire the best and compensate well
  2. Have a loan first mentality
  3. Be confidential
  4. Run every penny through the company



[20:20] “Don’t be scared to take on new forms of collateral. Don’t be scared to take on things that you don’t know a lot about. Educate yourself”



[22:05] “I like having a client in my office. I like having my clients come in to make their payment in person and not paying mobile”.


Yigal Adato

Yigal is a 3rd generation pawn broker, and is now a mentor, coach and educator with the pawnbroking industry.

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