Johnston County — As the economy has slipped into recession, some local pawnshops have seen more customers looking to secure a quick loan to make ends meet.

“Work’s been up; I get here earlier,” said Rex Suits, owner of Main Street Pawn in Clayton. “We’ve had a lot of increase in people bringing things in.”

A pawnshop functions by making short-term loans and holding clients’ possessions as collateral. If the client defaults on the loan, the pawnshop owner can sell the property to recoup his or her losses.

“We’ve had more higher-paid people coming in, a lot of college grads,” Suits said.

Jim Lassiter, owner of Zodiac Pawn in Smithfield, said he depends on a base of regulars but estimates he has seen a 5-percent increase in prospective customers. “A lot of people still living off credit cards, that’s gonna catch up with them one day,” he said.

Many customers, Lassiter added, looked to sell or take loans on gold as prices spiked in October. Jimmy Blow, the original owner and a current employee of The Jewel Box in Smithfield, said more people have sold gold in recent months. “They become more conscious of the fact that gold is worth money, and they have some things at home that are bent up and not used any more,” he said.

Tough economic times can bring pawnshops and second-hand buyers more business as people find themselves short on cash. But dangerous loans and investments can sink a shop as easily as they have toppled economic giants, shop owners say.

“A lot of shops have been put out of business because they spend their capital, then you have a shop full of stuff you can’t sell,” Suits said. He said that about 60 percent of his customers are now defaulting on loans, compared with 30 to 40 percent last spring.

“I was loaning money against the good-economy values,” Suits said. Ninety days in tough times can be enough to significantly decrease the value of an item, putting the pawnshop at a loss if the loan defaults. Some shops have seen a flood of construction tools and equipment, a result of a stagnant builders’ market. “Now, the biggest high-risk item would be construction tools because no one is working,” Suits said. “You take tools that a blue-collar man would buy, they’re just not buying.”

Suits said people have been coming into the shop most often with air conditioners, cordless drills, chainsaws and other construction equipment. But laptops and musical instruments are the safest bets for the shop, he said.

Lassiter said his knowledge and loyal customers have sustained his business. “If you can withstand recessions and depression, that’s the biggest thing,” he said. “As long as you treat people fair, they’ll come back to see you.”

Suits said he’s sympathetic to customers in hard times. “I’ve found that I tend to give a little more than the normal pawnshop,” he said. “I’ve been on both sides of the counter.”