It is the first rule of retail ... follow the money. And whether you are selling insurance or sink fittings, groceries or cars, the money is heading in the same direction. Online. No business, it seems, can afford to ignore the charms of the world wide web.

Not even pawnbroking. Flourishing more than it has for years, amid a credit crunch that has cut off financial lifelines for many thousands of Britons, a trade made infamous by Shakespeare's Shylock and Dickens and his “receptacles for misery and distress” is joining the internet revolution.

Albemarle & Bond (A&B) and Harvey & Thompson (H&T) may seem unlikely rivals for the likes of eBay and other internet trading giants, but they are undaunted. Amid a boom in their high street stores, both plan moves online this year, lured by the prospect of attracting more (and more affluent) middle-class customers, those who might, perhaps, still feel a stigma by passing through the doors.

They have been encouraged, too, by the presence of Borro, an internet start-up backed by The European Founders Fund (which also financed the likes of Facebook and Linkedin), that was launched in July last year. While A&B and H&T say that they have not really seen a change in the profile of their customer, with middle-class ABC1s still forming about 10 per cent of their borrowers, Borro says that it is tapping into a new market.

Paul Aiken, its founder, said: “People now openly talk about trading stuff on eBay. Our idea is that you can now free up equity from things you own for short-term loans without having to sell.” Borro, he added, tended to loan an average £700, compared with about £120 lent by high street pawnbrokers. About 75 per cent of the site's customers have never pawned an item before and about 70 per cent of them are in the middle class AB demographic — professionals and management.

Unlike the high street pawnbrokers, who focus on traditional jewellery and watches as surety for loans, Borro pawns all kinds of items, including Ferraris, Aston Martins and artworks. Since launching seven months ago, it has built its business into the equivalent of four to five high street pawn shops and expects to grow as much as fourfold by the end of this year.

Greville Nicholls, chief executive of A&B, agrees that the internet is a route for growth, which he is aiming to tap through the company's Herbert Brown brand in the next few weeks. But that is not to say that one of the UK's biggest pawnbrokers is being pushed webwards. Last week it revealed a 19 per cent rise in half-year pre-tax profits. As other retailers collapse, leaving gaps on high streets, it plans to open 30 new stores over the next three years, a 26 per cent increase on the 114 outlets it has at present.

H&T is planning up to 15 more stores this year, a 14 per cent rise on the 106 it already owns. John Nichols, H&T's chief executive, believes that the total number of pawnbrokers in the UK could double to 2,000 over time, becoming as ubiquitous as bookmakers, coffee shops or old-fashioned post offices.

Already pawnbrokers hand out more than £1billion of loans every year and some industry insiders predict that figure could rise by 30 to 40 per cent a year over the next three or four years.

Mr Nicholls argues that as banks tighten their lending criteria and rely increasingly on automated credit scores, pawnbrokers' attraction increases. “We are not going to credit blacklist anyone,” he said. “No one is going to end up in debt.” If a loan is not repaid, the pawned item is sold. The pawnbroker takes out his costs, the value of the loan and interest owed and then passes any profit to the borrower.

A&B's like-for-like sales rise 18 per cent last year, up from the 13 per cent to 14 per cent growth seen in the previous three years. That underlying growth comes on top of new store openings. H&T reports up to 20 per cent like-for-like growth for the past ten years as stores have improved and pawnbroking gained credibility.

With a tough economic climate and a huge rise in the price of gold, the commodity that forms the basis of most pawnbroking transactions, omens for the future are good. Given the modern climate, Shylock may not have needed to be so hard-hearted as to demand his pound of flesh.

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