Non-recourse pledge

Definition

The rule that a pawnbroker may pursue the pledged goods and nothing beyond them.

Why It Matters

A pawn loan is secured by the item and by nothing beyond it: the statute says the pawnbroker has no recourse against the pledgor for payment except the pledged goods themselves. That single sentence explains why the appraisal at the counter is the whole underwriting decision, why loan-to-value is conservative, and why a shop that has drifted upward on advance rates is carrying a risk that shows up as unsellable inventory later. Compare advance rates today against two years ago.