Paul Aitken, CEO of asset loan specialist borro, has revealed that art and antiques now account for 42% of the company’s loan book by value, with the more traditional asset loan categories of jewellery, watches and gold accounting for 48% and luxury and classic cars 10%.
Speaking at the 7th Art Investment Conference held at the RSA in London last month, he said the value of loans secured by art and antiques has grown by three and a half times in the last year.
They have lent against a wide range of assets but a more detailed breakdown of the art and antiques loans shows that fine art dominates the works currently being accepted as security:
• 19th Century Art & Sculpture 23%
• Contemporary Art 21%
• Impressionist and Modern Art 21%
• Antiques 11%
• 20th Century Art & Sculpture 7%
• Old Masters 6%
• 18th Century Art 5%
• Prints 3%
• Photography 2%
Launched in Oxford in 2008, borro has prospered in a financial climate where conventional banks have remained very wary of lending money against anything but real estate and have generally given personal assets a wide berth.
Mr Aitken said that, overall, borro has grown by two and a half times in the past year. They already have an office in New York with two more planned for other US locations.
Speaking after the conference, borro managing director Claire Gates said she believed that the business is evolving as it grows.
"With the discretion and the flexible service we can offer we are moving more towards a private banking experience. Clients offering assets up as security have to prove ownership but the service is non-judgmental," she said.
"There are no credit checks and credit rating is not impacted. We can adapt to their needs. Some prefer to conduct the process at arm's length, others are keen to build a personal relationship with us."
Releasing Stock Value
Depending on their needs, firms with money tied up in stock can release part of that value for other projects. Individuals with short-term liquidity problems can achieve their aims without running the risks associated with a fire sale.
There has been a steady increase in consignment loans since the launch of the service last year, she said. Buyers who want to sell can negotiate an immediate advance (typically 40-60% of valuation) prior to the sale.
Ms Gates stressed that the firm increasingly find themselves advising clients on the best time, place and method of sale. "We can represent them and negotiate on their behalf. If we handle the whole process it takes all the administrative worries away from them," she said.
Borro say that they aim to release funds within 24 hours of taking possession of assets and agreeing a valuation. Small items are secured in the vaults at borro's premises in Chancery Lane. Larger items are sent to secure storage at Ward Thomas.