While many industries struggled to recover from the recent recession, a few were growing naturally, in large part due to the worldwide belt-tightening. One example? High-end pawn brokers.
With banks still hesitant to give loans, people with jewelry, art and even vintage wine, have gone to these brokers for a quick trade of assets for cash. Borro, one of the primary firms in the business, offers personal-asset loans for up to $2 million — many on the same day or within days. Launched in London in 2008, Borro arrived in the U.S. last year. Recently, we spoke to founder and CEO Pail Aitken about Borro’s model — and why the company dislikes the term “pawn broker.”
CBS MoneyWatch: Borro has been defined as a high-end pawn broker. Why don’t you like this term?
Paul Aitken: Technically that’s right. But technically a bank that does asset-backed loans is also a high-end pawn broker. It doesn’t totally encapsulate what we do, and our customers don’t see us that way. We’re online and have offices in big cities, locations where companies can see us, but it’s very discreet.
Our average loan value is $15,000, which is close to 100 times the average sale at a pawn shop. In terms of the assets we accept, they are mostly nice watches and jewelry, but we also do esoteric assets like fine arts, luxury car and collectibles like Oscars and Grammy awards. We don’t go below $1,000.
MW: So how does a loan from Borro differ from a bank loan?
PA: We are lending against the assets. There are no credit checks for the individual. Speed is also a big differentiator. We can write loans the same day on watches and jewelry. Cars are the next day.
Read the full interview at CBSNews.com