From Rolex Watches to Banksy Artwork: How Luxury Pawn Loans Offer Financial Flexibility
As we navigate our way through the current financial crisis, it’s understandable that short term cash flow issues are going to be on the increase. For anyone who finds themselves facing liquidity challenges, either in their personal or business life, it’s worth knowing that if you are fortunate enough to own luxury assets such as watches and jewellery, there is a very efficient alternative available to the traditional bank or property bridging loan and this this is where Suttons and Robertsons can help.
As the saying goes, “To be prepared is half the victory” (Miguel de Cervantes), so here you’ll find all you need to know about utilising your valuable, luxury assets – perhaps a Rolex watch in the drawer, a diamond ring that sits in its box, or even a prized collection of fine wine accrued over time – to secure a quick, confidential short-term pawnbroking loan.
Luxury Pawn Loans On The Rise
Business owners and entrepreneurs who have built up opulent lifestyle collections of prestige cars, art and antiques, fine wine, watches, jewellery and diamonds are now seeking out luxury asset short term lenders to help them through these tricky times. With an average loan size now around £6,000, 90% of its loans are secured against luxury watches, such as Cartier, Patek Phillipe and Rolex, Jewellery, which is often branded items like Tiffany, Boodles and Bvlgari, as well as Gold Coins and Bullion. The focus is totally on the value of the asset being offered as security, and completion is only limited by the time it takes to make a valuation. In fact, funding can often be completed on the same day.
Interest rates are competitive for short-term solutions, with the average loan being taken for somewhere between 3 and 6 months. The typical loan to value (LTV) is 50-70% and with no long forms, no credit checks and no fees for valuation or legal work, luxury asset short-term loans are a far cry from the lengthy process of securing a bank loan.
The Pawn Shop Process Explained
Suttons and Robertsons, the oldest luxury pawnbrokers in the UK, has three pawn shops across the capital, which means that you’ll always be within easy reach of one of its shops.
A pawnbroking transaction is a very simple and straightforward agreement that can be traced back to both Ancient Rome and Greece. You simply provide us with details of your luxury assets online or come into store. We value your luxury assets usually within a few hours and then provide you with a loan offer. The loan offer is usually between 50 – 70% of the luxury asset value – this is known as the loan-to-value ratio or LTV. A monthly interest rate is set, and the interest is only payable at the point of redemption. You can redeem the loan at any point during the loan and will only pay the interest accrued up to that point.
For example, imagine you own a Rolex watch and it is valued at £20,000, you will possibly be offered a loan of £14,000 (70% LTV). You would then take your Rolex watch, which Suttons and Robertsons would take into its possession and keep in its highly secure vaults, and you will receive the £14,000 loan by bank transfer. You will then be charged interest. If you want to redeem the loan after 3 months, you have to pay the £14,000 loan amount plus the accrued interest up to that point. After the pawnbroker receives that payment, your Rolex watch is given back to you in the same or often even better condition than when it was received.
Luxury Pawn Loans for all Purposes
As well as facilitating bridge loans to aid cash flow, how else can luxury asset short term loans be of benefit?
Some clients may wish to release equity in their luxury assets in advance of their sale at auction and we have a sister company that offers such products. The appraisals team would work with the client to find the best auction house to sell the assets, and a proportion of the reserve sale price would be given as a ‘Sale Advance Loan’.
Short term loans are also being taken by clients to fund further luxury asset acquisitions; clients are leveraging their current luxury asset collections to acquire new additions for their portfolio. For example, a client may settle the purchase of a new luxury asset from an auction house with the help of our funding.
So whether borrowers need a loan to pay private school fees, unexpected tax bills, to cover a shortfall in development costs for a property, or to purchase more art or antiques, utilising a luxury asset short term loan company could well be the answer.
Jim Tannahill, Managing Director at Suttons and Robertsons recently summed up the luxury pawn lending market by commenting: “Our business levels are growing because lending against luxury assets offers an increasingly pragmatic solution as an alternative source of short-term funding for all private and business purposes. We consistently work to, and stick by, our three core principles of ‘Transparency, Ease and Confidentiality’. This ensures we provide a trustworthy, discrete and expert service to all our clients”.
Mr Tannahill is keen to emphasise that pawnbroking loans are short-term solutions; for long-term financing needs, you should consider other options.
For further information, please visit the Suttons and Robertsons website.
