What if you have a dead cert in the 3.15 at Kempton and need some cash? Banks have new competitors on the high street. Pawnbrokers

Unlike their Dickensian counterparts, today's pawnbrokers lurk in light and airy pot-planted designer shops. The rusting grills have been replaced by clear glass screens and only the three gold balls above the door betray the shop's building society disguise. In five minutes flat you can swap your golf clubs for two tickets to France for the weekend and swap them back again when your salary cheque fattens your bank account at the end of the month. You'll even get your clubs stored at the pawnbrokers - considerably safer than a Heathrow car park.

You will also be joining the masses who have come to regard the pawn shop as a "healthy lending institution which competes with others on the high street", according to Nathan Finch of the National Association of Pawnbrokers.

The NAP's membership has doubled over the last decade. Mr Finch attributes this to the increasing acceptability of borrowing money and the sharpening of the pawnbroking image. "Forty years ago, you didn't borrow," he says.

There is also the sheer convenience of being able to walk out of a pawnshop with cash in your hand, no questions asked, within a few minutes of walking in.

Instant and trouble-free cash is a key advantage to pawning. "You don't have to explain to your bank manager that you need to buy a new outfit to go to Paris with the man of your dreams," says Mr Finch.

"Or that you've got a dead cert running in the 3.15 at Kempton. In any case, he'd ask you to come back in a couple of weeks and sign some forms, which wouldn't be much good if you've got a plane or race to catch that afternoon."

The hitch is that you must leave your pledge with the pawnbroker until you redeem your loan and the interest that is owed on it.

So, no golf until you have paid for the plane tickets. But then some people turn to pawnbrokers as a form of safe storage. "It is not uncommon for holidaymakers to leave their jewellery with a pawnbroker in exchange for a nominal loan," says Mr Finch.

Given that a safety deposit box at the bank will cost around pounds 30 a year, plus fees of pounds 5-pounds 10 every time you open it, paying pounds 12 in interest twice a year and getting pounds 200 in extra holiday money in the bargain is worth considering.

Loans are for six months, renewable at the pawnbroker's discretion. If the pledge left is not redeemed at the end of this period, the pawnbroker can sell it in order to reimburse himself or herself for the loan and interest lost.

Contrary to popular suspicion, pawnbrokers do not pocket huge margins on unredeemed goods. Pawnbroking in the UK is regulated by the Consumer Credit Act 1974 and complementary regulations, which lay down strict rules as to when and how a pawnbroker can sell unredeemed pledges.

There are three categories of loan. If less than pounds 25, the goods become the property of the pawnbroker. If pounds 25-pounds 50 has been lent, the pawnbroker must send the pawner a result of sale notice. This states that any money received from the sale over and above the loan and interest owed to the pawnbroker, together with reasonable costs of sale, must be returned to the pawner.

If the amount lent is over pounds 50 then the pawnbroker must give the pawner 14 days' notice of his intention to sell the goods.

The pawner can require the pawnbroker to prove reasonable care was taken to obtain true market value for the pawn. One way to do this is for the goods to be sold at auction.

Difficulties arose in this area recently when Alexanders the Jewellers of Farnham, Surrey, used internal sales in order to ascertain the true market value and customers complained that these were made at unfairly low prices.

After investigation, Alexanders agreed with the Ofice of Fair Trading that they would in future agree internal sale prices with the pawner.

Pawnbrokers make profits on the interest paid on the loans. This is usually charged at between 3 and 7 per cent a month, depending on the pawnbroker and the size of the loan.

The amount advanced on a pledge will be sufficiently below its resale vlaue to cover the full six months' interest and costs of sale. This can range between pawnbrokers from one-third to three-quarters of the forced sale value of the object pledged.

Although 80 per cent of pawnbrokers still only accept jewellery, others have been branching out. Some specialise. Archie Crockett of the Glasgow Pawnbroking Company is known for accepting musical instruments. Clough Antiques, one of the fine art and antique shops lining London's Bond Street, is also a pawnbroker.

Tolots in Corby, Northants, will accept "anything with a secondhand value'' and lends any amount, from pounds 10 to pounds 25,000. It takes stereos and televisions to art and antiques, cars and even a house. In the latter case Tolots registered a charge over the property of 4 per cent a month, which is more expensive than a mortgage from your local bank.

Financial products are also pawnable. Tolots has accepted a charge against a fully paid up life insurance policy and has even taken an assignment of blue chip shares, including BA, British Gas, Anglian Water and supermarket companies.

Whilst pledging shares will still allow you to play golf, be careful. If they are still assigned to the pawnbroker when dividends are paid your loan could end up costing you more than you had expected.

The type and value of goods pawned plus the fact that 80 per cent of pledges are redeemed strongly suggest that the pawnshop is no longer the domain of the strictly penniless.

Michael Saunders of the discreetly named Berkeley Credit and Finance says his west London clientele consists of "everyone from the local hooker to Lord and Lady So and So. The bank manager will not do a deal if you are wearing a watch worth pounds 10,000 and need to pay the school fees''.

Mike Clough of Clough Antiques denies that his clientele is restricted to the usual Bond Street shopper. "We go right across the board. We look after girls whose wage cheques have bounced because their firm has gone into liquidation.''

The recession has meant growth for the industry. "The banks caught such a cold in the eighties that they are now exorcising these ghosts from accounts today,'' says Mr Saunders.

"They used to let Visa payments go for a couple of months Now you'll get a phone call at work and a red letter straight away," he adds.

People are being pushed to meet bills. Mr Saunders has seen a doctor who pledged his heart monitor equipment to raise money for a tax bill. Tolots has accepted company cars from businessmen trying to raise cash.

The high interest rates charged by pawnbrokers generally makes pawning a sensible option for only those who cannot get funds elsewhere - either because they have reached their borrowing limit or because they need cash on the spot. Monthly borrowing rates of 3 to 7 per cent are equivalent to astronomical annual rates of 39 to over 100 per cent. Even so, it can work out cheaper than some forms of bank borrowing.

Where pawnbrokers provide value for money is in short term lending of up to a few hundred pounds. While personal loans from the high street banks offer equivalent monthly borrowing rates of around 1.5 per cent (about one quarter of the 6 per cent a pawnbroker is likely to charge) the minimum loan is pounds 500. Smaller amounts can only be borrowed on overdraft and this is where the costs emerge.

The banks make monthly charges for accounts in overderaft. These range from pounds 5 at Barclays to pounds 9 at National Westminster in addition to interest charges. The cost of borrowing pounds 100 for one month on overdraft from a Big Four bank ranges from pounds 6.50 to pounds 10.46. On the other hand a pawnbroker will probably charge you 6 per cent a month for your pounds 100, a mere pounds 6.

However, if the sum borrowed increases to pounds 200 the pawnbroker's fee doubles but the bank's charge is not repeated. The pawnbroker works out as more expensive at pounds 12 whereas the bank will charge you between pounds 8 and pounds 11.96.

If you are already in the red you will already be paying the standing charge. In this case the overdraft rate of around 1.5 per cent on pounds 100, adding up to pounds 1.50, will be a lower marginal cost than the pounds 6 charged by the pawnbroker. But this only works if your overdraft limit can accommodate the extra borrowing. Once you go beyond the pale on your overdraft the charges start coming thick and fast.

Unauthorised overdrafts are more expensive than a pawnbroker's loan of up to pounds 500 at 6 per cent. This will cost you pounds 30 for the month and only Midland will charge you less: pounds 26.50. Lloyds will charge you pounds 8 and 2 per cent interest a month plus pounds 7 for each day on which your overdraft increases by more than pounds 10. If you are drawing living expenses from your current account this could be most days.

Even if you make just four cash withdrawals over the month your borrowing bill will be pounds 36 before interest. NatWest charges pounds 9 and 2.46 per cent a month and a daily charge of pounds 3.50 if you are more than pounds 50 over your limit. A couple of weeks of this will cost you pounds 44 before interest.

The cheapest solution to borrowing for less than a month is still a credit card. If you pay your bills immediately you will pay nothing apart from the annual charge of around pounds 12. However, to do this you need a credit card with room available to spend.

If you can foresee your need for that extra couple of hundred pounds sufficiently far ahead to be able to order a new credit card, do it.

But if it's a rainy Friday afternoon and the last CD player left in stock is beckoning for the weekend you may want some cash instantly. Your best bet might be to grab some of your own swag and trot around to your nearest pawnbroker.