Pawnbrokers power to the fore again
Whilst many small firms complain that banks are unwilling to lend, pawnbrokers across the UK are reporting a big rise in the number of business people coming to them for short term loans.
One firm, Borro, says it has seen a 45% rise in small business customers over the past six months alone.
“The reluctance of the banking sector to lend in recent years has certainly helped us, but it is more than that,” says Borro founder Paul Aitken at his office in the City of London.
“Thanks to the internet and changing attitudes, pawnbroking has become a lot more accessible and acceptable. We are now attracting more and more people who have a lot of assets, but some short-term cash issues, such as a vital need to get a deal sorted as quickly as possible.”
Borro, which claims to be the world’s first online pawnbroker, will typically lend 70% of the value of the item being pawned. So if you bring in a watch worth £10,000, you can borrow £7,000.
And while the interest it charges is high – an annual rate of up to 69% – Mr Aitken insists it is still good value.
“The APR [annual percentage rate] doesn’t look good, but this is not about long-term loans,” he says. “We are talking loans over say one to four months, with no administration fees, or penalties for early repayment.”
As the number of business customers using Borro continues to grow, so does the sheer range of items that the company says people are bringing in.
“We’ve had City types drive up their Ferarris, or bring in paintings, antiques, music memorabilia, signed first edition books, stamps etc,” he says.
“We’ve even had a few pieces of work by street artist Banksy… but paintings he has done on canvas rather than the wall of a terrace house in Bristol.”
September 8, 2010
Tags: borrowing, Interest Rates, pawnbrokers, refinancing rates, sub prime loans Posted in: Uncategorized
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Home & Business Lawyer 2010 | personal injury lawyers - September 8, 2010
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