Borro is a UK-US-based online pawnbroker and secured lender that offers loans secured on luxury assets. The company provides loans allowing clients to use luxury assets such as fine art, luxury and classic cars, jewellery, watches, antiques, fine wine, luxury handbags, memorabilia and other valuables. The company has offices in London, New York and Los Angeles.
As of September 2017 Borro has written over $397,000,000 in lending and its average loan size on luxury assets is £55,000.
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History
Borro is a privately held finance company and was first funded by European Founders and partners Eden Ventures. In 2011 the asset lender received two sets of funding, firstly a £7,500,000 investment from Augmentum Capital in April 2011, then Octopus in a deal that would allow business to "meet the demands of services".
In March 2014 Borro raised £67,000,000 from a venture capital firm. In February 2015, Borro raised an additional $19,500,000 in funding. This round pushed Borro's total capital raised to over $200,000,000.
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Services
Borro was lauded as the UK's first ever online luxury asset lender. Soon after launch the company's advertising campaign commenced on television, aimed at the daytime audience and those seeking to take "discreet" loans online. Credit Today named Borro Alternative Lender of the Year in 2011 and 2012.
The success of Borro and the other newly established online loan companies can be aligned to the worldwide economic decline of 2008-2010. It was felt by some that, with banks cutting back on readily available funds to offer as loans to their customers, luxury asset lenders would be the acceptable alternative and that more people would begin to use the service. This trend to bypass banks and more conventional lenders has not just been applicable to personal finance but has risen in the business sector too with a reported one in four customers using Borro to facilitate a business transaction or opportunity.
In its initial 4 months Borro doubled its loan book every month, as a surge in business owners, developers, and City financiers attempted to secure loans on their luxury items gained in more wealthy times. By June 2011 it was reported in The Times that Borro conducted its first £1,000,000 loan.
In August 2013 it was suggested that online asset lending is a viable option when raising finance for a start-up company. It was also suggested that the increase in popularity of asset lending relates to the speed in which the funds could be released because the loan itself is secured against an asset.
The rise of online luxury asset lending was again underlined in 2014 when an article from Real Homes stating that asset lending could be used to raise finance for major renovations around the house. In the same month, it was presented by This is Money that jewellery can be used as collateral when sourcing funds for a new business.
In response to partner demand, Borro introduced a new, long-term loan in March 2015. Term Loans provide loans for 18, 24 or 36 months. Prompted by the launch of the Term Loan, Borro changed the name of its flagship product to Bridging Loans. Sale Advance Loans round out Borro's product offerings. This product provides clients with a loan on their luxury asset(s) prior to it being sold at auction or private sale by Borro's experts. Upon sale of the luxury asset(s) the net proceeds are then remitted to the client.
On July 4th, 2017 John Allbrook became CEO of Borro , replacing Paul Aitken who stepped down from the role.
In the Media
Amidst the United Kingdom Parliamentary expenses scandal in 2009, Borro offered any "struggling" MPs a loan at half the normal interest rates.
In 2011 Borro was featured in a Channel 4 documentary "The Pawn King" as part of its "First Cut" series which featured Paul Aitken the CEO and founder and an insight into the Pawnbroking industry. Screened at 7pm on Jan 14th, 2011, Channel 4 used the following to describe the programme: "In the tough economic climate, pawning is no longer just the preserve of the poor. First Cut provides a fascinating insight into the pawnbroking business." In a review the Guardian stated "Aitken's warehouses are crammed with Ferraris and artworks as well as the usual trinkets of sentimental but small financial value"
In June 2011 Borro demonstrated why SME's are turning to short term lenders for cash as reported by the Financial Times In an interview for Bloomberg Paul Aitken expanded this point showing there was a greater trend in the self-employed and SME's looking for alternatives to bank funding as they are finding it increasingly difficult to raise finance in a conventional manner. So much so that in a Borro survey reported in the Financial Times, one in ten small business owners were willing to put up their domicile as security for a loan because of lack of viable alternatives.
At the beginning of 2012 the Daily Express highlighted the rise of families using their assets to raise money to pay school fees, solve business cash-flow problems or meet mortgage repayments, whereas The Daily Telegraph Business Club showed Borro as a new alternative lender.
On launching in the US Reuters reported in February 2012 the increasing number of people using wine collections as security for loans, as Borro lends $120,000 in exchange for 128 bottles of Chateau d'Yquem. Interest in the diverse range of assets used to secure finance with Borro was also expressed by CNN Money in the article "Got a Picasso? Get a small business loan." highlighting the use of asset based loans by entrepreneurs and small businesses.
In April 2012 Yahoo Finance charted the rise of high end asset lending highlighting how people are increasingly lending against assets due to lack of lending from the banks.
In July 2012 Forbes magazine quoted Paul Aitken's wishes to expand Borro further by creating a presence in California.
In July 2012 the Daily Mail presented how asset lending has become more popular amongst wealthy business owners that bought expensive assets during the years before the recession and now use them to speedily finance business opportunities. Yahoo cars highlighted the quantity and quality of cars being used to secure a loan.
In October 2012, Paul Aitken (CEO and Founder of Borro) explained in an interview for The Huffington Post that there was an increase on small firms using alternative financing methods because those alternative methods are more accessible than the banks.
In November 2012, The Telegraph showed how wealthy individuals are using their valuable pieces of art to take out loans in order to raise finance.
The Times reported in February 2013 that Borro had appointed Nigel Morris, one of the UK's most successful entrepreneurs and co-founder of Capital One as chairman.
In August 2013 BestAdvice.net reported on how introducers are providing a business boost to Borro, stating that Borro had seen a 40% increase in sign-ups to its introducer programme, which includes; wine merchants, art dealers, mortgage brokers, accountants, wealth managers and loan brokers. During the same month, the Financial Times presented that there had been an increase in the amount of fine wine used to raise funds.
In October 2013 the Wall Street Journal showed that Borro as a personal asset lender fills a lending void that was perhaps previously unavailable. In this particular report, Borro had assisted an individual in releasing equity in a bronze nude torso sculpture.
The Mirror presented in December 2013 the variety of assets that Borro have lent against. The article showed that Borro has released equity in everything from Olympic gold medals to F1 cars and Oscars.
The Economic Voice presented in August 2014 that Borro were continuing to boost small businesses by offering alternative methods of financing. It was reported in the article that the average SME loan at Borro had increased from £24000 to £26000 from the previous year.
In October 2014, the Wall Street Journal produced an online video featuring Borro. CEO, Paul Aitken, was interviewed about the history of the business and how it provides short-term loans to the wealthy.
In February 2015, Borro was featured on CNN's Out Front with Erin Burnett. The piece focused on the appeal of Borro to the rich and famous.
In April 2015, The Times covered Borro and interviewed Group Sales Director, Claire Barrington-Jones about how asset-backed lending is on the rise despite the economy's recovery.
References
External links
- Official Site
Source of the article : Wikipedia
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