Hock wheels: collateral loans on automobiles--even planes--set Bruce Singer's RPM Lenders apart from the traditional notion of a pawn shop.

AFTER opening his pawn business in 1992, Bruce Singer enticed Lakers announcer Chick Hearn to stop by, and if he liked what he saw, to become the company's spokesman.

Hearn expected to see banjos hanging from the ceiling and guns in a glass case. Instead, he saw a lot full of cars and what basically looked like an automobile dealership. "That was just the kind of guy we wanted to represent us," Singer said. (Hearn did television and radio ads until his death in 2002.)

As Hearn quickly discovered, Singer's business, RPM Lenders, represents another slice of the pawn broker game, as down-on-their-luck customers temporarily warehouse a car, airplane, motorcycle or recreational vehicle in one of the four storage facilities totaling 1 million square feet. RPM makes loans of $100 to $100,000--the median loan is $1,500--based on a 50 percent valuation of the collateral.

Singer has created the state's largest auto pawn operation, with more than 12,000 loans annually that last year generated $6.2 million. The company's true name is JWP Lenders Corp.; Singer kept using RPM when he switched from auto rentals to auto pawn in the early 1990s.

"He was one of the first people to specialize in auto pawn and was a pioneer," said Sam Shocket, owner of L.A.-based King's Jewelry & Loan Co., an all-jewelry broker that is the state's largest pawn operation. "He knows the pitfalls of the business and doesn't get caught with surprise costs."

Minimizing the risk

Singer says that many of his customers are asset-rich but need a quick infusion of cash--whether it's to close escrow on a house or last-minute travel plans. Entertainment types are a considerable part of the client base because their work is often sandwiched between long periods waiting for the next paycheck.

Singer said he recently loaned money to a lawyer representing an author who was about to embark on a national book-signing tour for a publisher that had failed to advance travel expenses. "All these people get paid very handsomely while the meter is running," said Singer. "But until the meter is running, they need to feed their kids and pay their rent or mortgage."

When new customers arrive, RPM conducts a background check to make sure their credit is good. The vehicles themselves are also researched, to ensure they are not stolen or encumbered with bank debt, registration penalties or unpaid parking tickets.

Interest, as mandated by the state for all pawn operations, is 3 percent per month for loans under $2,500 and at a negotiated rate between both parties for greater amounts. (Storage fees are not included.)

In RPM's case, negotiated rates range from 4 percent to 10 percent per month depending on the size or the loan, the customer's credit history and past experience with the borrower.

Pawnbrokers must keep merchandise for at least four months and in Singer's case, the merchandise he takes is not even accessible for view, let alone purchase, during the loan period--a sensitive point for higher-profile clients concerned that friends and neighbors might recognize their vehicles.

Singer offers customers advice, and helps with business plans. RPM clients post a redemption rate of 90 percent on the products they pawn, in part because Singer is often willing to extend their loan agreement if they have difficulty meeting the payment deadline.

Love for cars

Pawn brokering is a far cry from Singer's early ambition when he moved out here from Cambridge, Mass. in 1975 to attend Whittier College School of Law in Hancock Park. To help pay expenses, he sold and rented roller skates out of a Cadillac hearse in Venice. (His company motto: "Let us undertake your skating needs.")

After earning his degree in 1978, he practiced family law for four years. But Singer's passion was cars and the people who drive them. So he got into the car rental business, opening RPM Rent-A-Car in Tarzana in 1981. By 1990, he had 23 locations throughout California, Nevada, Arizona and Mexico.

Inc. magazine placed Singer 91st on its 1990 list of the nation's fastest growing private companies. But when the major car manufacturers started buying rental car companies, he knew his days were numbered.

"There is always going to be a day when somebody will come along and be able to articulate your deficiencies in a business plan and capitalize on that," said Singer. "The next thing you know, you've got competition."

His vulnerability was being a regional operator in an industry that had become dominated by national chains.

So he sold his company for an undisclosed sum in 1990 to Chrysler Corp. (now DaimlerChrysler), which promptly merged the holdings into Dollar Rent A Car and Thrifty Car Rental. Singer opened RPM Lenders two years later.

Last January, he expanded his operation with a title loan unit that allows clients to keep their vehicles throughout the loan period at interest rates comparable to pawn loans.

The program is geared primarily toward those who own only one car and cannot afford to part with it, even for a short period.

But RPM Lenders will only loan against vehicles worth at least $4,500, and requires clients to submit to a "character" interview to better determine if he or she is likely to repay the loan.

"The risks of something going wrong with that vehicle are significantly lowered than by going with (a jalopy)," said Singer.

PROFILE

JWP Lenders Corp. (known as RPM Lenders)

Year Founded: 1992

Core Business: Collateral lending on motor vehicles

Revenues in 2002: $5.7 million

Revenues in 2003: $6.2 million

Employees in 2002: 14

Employees in 2003:14

Goal: To maintain status as California's largest auto pawn operation and grow title loan unit

Driving Force: Customers who need a quick cash infusion