🧠 Valuation Insight: The Hidden Risks in Pawn Shop Cash Flow

💰 Pawn shops can show strong margins—but what’s behind the numbers?

Key challenges:

  • Inventory is often customer-owned (not shop-owned)
  • Interest income depends on redemption cycles
  • Retail side often subsidizes unprofitable loans
  • High-risk addbacks: family labor, cash skims, unbooked transactions