Pawn Shops loan money based on the collateral value of goods, in our case, jewelry and coins. The loan is usually short-term (in California, the term is 4 months, with a grace period). At the end of this term, when the borrower repays the loan with interest, the collateral goods are returned to the borrower. If the borrower chooses to not repay the loan and interest (default), the goods become the property of the Pawn Shop. The Pawn Shop then needs to sell the goods in order to pay off the loan.