Be it their style, story or performance, classic, collectible, and prestige cars are undoubtedly works of art. It’s no surprise their sales continue to dominate the luxury market, with a soaring 10-year value appreciation performance of over 330%. This fact is a major reason why borrowers often use this class of car in collateral loan transactions.
Why get a collateral loan?
Why do owners of classic, collectible, and prestige cars use collateral lenders such as Borro as a financing source? For those fortunate enough to own such assets, collateral loans offer extremely attractive means of quickly generating additional capital without being rushed into a sale. Their ability to provide capital in as little as one business day, coupled with high levels of transparency, convenience, and service, make collateral lenders a valued ongoing financial resource for luxury asset owners alongside their accountants, banks, and financial advisors.
How classic, collectible, and prestige car owners tapped the equity in their luxury assets
Even those with substantial wealth and income face situations where quickly and easily gaining access to capital can realize opportunities or resolve problems as they arise. For example, one Borro client needed capital to bridge a funding gap preventing the close of a real estate purchase. The timeframe to arrange traditional funding would extend beyond the targeted close date, jeopardizing the deal. He used six classic cars from his collection as collateral to obtain a $4.2 million loan, which was funded in seven days, to close his real-estate purchase. After traditional funding was subsequently secured, his Borro loan was repaid, and his vehicles were returned from Borro’s secure and fully insured storage location.
Another Borro client is a classic car collector who needed capital to fund the expansion of his collection when an exquisite vehicle suddenly became available. Time was of the essence as demand would be high within the collector community, and the collector did not have sufficient cash on hand to fund the purchase. The borrower used one of the classic cars already in his collection to obtain a $159,000 loan in a few days. Using this capital, he was able to expand his collection by leveraging the substantial assets of the collection itself. After other financing became available a few months later, the Borro loan was repaid, and the asset was returned.
Yet another Borro client used his classic automobiles to help cover an unexpectedly large tax bill arising from a significant capital gain. Liquidating other invested assets to pay the tax bill was an available, but unattractive option from both market timing and future tax liability perspectives. Fortunately, he owned three classic cars that provided sufficient collateral for a $530,000 loan. Cash was wired in two days enabling the outsized tax bill to be paid without the need to liquidate other invested assets or sell his cars hastily. When market conditions were more favorable, some assets were liquidated, the Borro loan was repaid, and the client’s assets were returned.
These are just three examples of how collectors, investors, and entrepreneurs are tapping the equity in luxury assets such as classic, collectible, and prestige cars to handle situations and realize opportunities quickly and easily through collateral loans. Leading collateral lenders like Borro have dedicated resources available to work with these asset owners to ensure the proper valuation of their cars as part of their loan underwriting process, and the care and storage of assets being held as collateral.
Who is Borro?
Borro, a Luxury Asset Capital® brand, is the leader in confidential loans that use the borrower’s luxury assets as collateral. We are a timely alternative to traditional loans that are often either too slow, invasive & burdensome or, in some cases, unavailable. We unlock the equity in a wide range of luxury assets that are high in value but low in liquidity and execute transactions from thousands to millions of dollars in as little as one business day.
We were established to provide capital to individuals at critical moments because we can be trusted to move quickly and confidentially to meet individual and business financial deadlines. We have been a lender to over 15,000 clients, providing over $450 million in loans since our founding in 2008. Borro’s industry-standard-setting levels of transparency, convenience, and service are making Borro the leader in trusted, alternative loan solutions.
For more information, please visit: https://borro.com/assets-we-accept/luxury-and-classic-cars/