Claire Barrington-Jones, Director at Borro, explains how the UK’s affluent investors are flocking to the asset-backed lending platform with art, jewellery and collectibles as an alternative investment.
Borro has become a byword for high-end lending in recent years. How does the service work?
Borro is an online platform for luxury asset-backed lending. We offer fast and efficient loans to high net worth individuals, entrepreneurs and business owners, with clients using luxury assets such as fine art, antiques, jewellery, handbags, luxury watches, prestige and classic cars as collateral for loans.
What amounts are involved and which assets do your clients tend to offer as collateral?
The business has lent £125m against luxury assets since launch and expects to lend another £100m this year. Currently, art makes up a sizeable proportion of the valuable assets on the books at Borro and the vaults have been home to some exquisite pieces including work by artists including Banksy, Turner, Antony Gormley and Barbara Hepworth. Recently, a collection of work by Andy Warhol secured a £350,000 loan.
Fine art has long been a popular method of investment but prized pieces can be hard to part with from both a financial and a sentimental perspective, so temporarily borrowing against them is the perfect solution for many owners. In this half of the year, Borro saw a 105% increase in the value of lending against fine art.
Borro’s network of vaults deep underground Chancery Lane house is filled with pieces of fine art, antiques and luxury watch collections. It very much resembles storage for a world-class museum!
Do you have any slightly unusual items come in?
As well as art, Borro sees clients use a wide range of other interesting assets as collateral for loans. A collection of swords achieved a loan value of £200,000 for one client for example, while another client secured a £500,000 loan using a collection of vintage Gibson and Fender electric guitars. Another recent loan was £50,000 loan against a rare Hermes Birkin bag in black crocodile.
How do you go about valuing such a wide range of assets and how does the loan process work?
What makes Borro unique is the expertise of those who value and care for the assets, all of whom are industry professionals. Assets are valued by the expert in-house valuation team and by utilising such expertise, clients are offered the best possible loan value. After applying online customers can make an appointment, or arrange for their assets to be couriered, for valuation. If the client accepts the loan offer then funds are immediately wired into their bank account.
How would you describe your approach to client service?
We aim to make the Borro experience as convenient and personal as possible for clients and we appreciate that dealing with valuable and unusual assets requires a marked level of sensitivity. For many clients, unlocking the value of unique luxury assets provides a solution that doesn’t involve permanently parting with items which may be family heirlooms with a great deal of sentimental value attached. Client relationships are kept completely confidential and, unless clear consent is given, all transactions with Borro are totally private.
How does Borro work with wealth managers and other companies to increase access to your service?
Over the last year, Borro has seen a 90% rise in sign-ups to its Partnership Programme, which includes private banks, art dealers and wine merchants, alongside wealth managers, IFAs and loan brokers. Partners have become more aware that services like Borro can offer their clients a fast and transparent lending channel.
Borro’s recently launched Term Loan, which enables clients to secure loans from £100,000 up to £5m over a time period of 18 to 36 months, came as a direct response to demand from these partners whose clients – namely high net worth individuals and business owners – are seeking funding to service longer-term opportunities.
As well as the Term Loan, Borro offers the Bridging Loan (loans of up to six months) and its Sale Advance Loan. We manage the sale of luxury assets, leveraging relationships with auction houses and private sellers to maximise sales returns.
Where next for the service?
Borro is on a journey to become the one-stop-shop for liquidity on luxuries, offering a lending platform for clients and businesses who own, or trade in, high-value assets. Investing in tangible assets is highly desirable for many, and global lending secured by arts and collectibles alone currently represents a £4bn market which is expected to increase three-fold over the next five years.
If you’d like to start a conversation with Borro please contact the findaWEALTHMANAGER.com team HERE.