Luxury goods finance will help you unlock capital tied up in your personal luxury goods collection. Lenders will grant you a loan, in return using your luxury assets as security. You’ll be able to use the capital you raise from this type of loan for nearly any reason. However, in most cases, you’ll usually use the proceeds of the loan to provide liquidity for a business need, to reinvest (i.e., buy other appreciating luxury goods, diversify assets, or invest in a business), or pay off business or personal debt.
It’s important to note, you will not be able to retain possession of your luxury goods for the period of the loan. Legally, you will remain the owner, and after you have paid the loan back, your goods will be returned to you, but you will not be able to enjoy them during the loan.
If you’d like to explore luxury goods finance, Enness’ will start by asking you about the assets you’d like to use as collateral. Your broker will also ask you about how much you would like to borrow and your timeline.
Luxury goods finance is a very specialist area of the market. You’ll be able to find lenders yourself, but you may not get the best deals or terms if you are negotiating yourself. Additionally, you’ll want to ensure you are working with trustworthy and discreet lenders rather than into a pawnbroker-style relationship. Enness has relationships with over 500 specialist lenders, and your broker will be able to go straight to the source of the most advantageous finance from honourable, expert lenders.
Truly specialist lenders in this part of the market are relatively few and far between, but it is possible to borrow significant amounts if you have the right profile and the right luxury goods. Depending on your assets, you will be able to borrow anything from a few hundred thousand pounds up to £5 million. Enness works with clients and lenders worldwide, and your broker will be able to help you secure financing regardless of where you are based or your citizenship.
The type of luxury goods you are using as security, the value, brand or designer, provenance and amount you want to borrow will influence which lender Enness will approach on your behalf. Enness will go straight to the best sources of luxury goods finance, and your broker will be on hand to assist you with anything you need until your deal is completed.
The higher-value and more liquid your luxury goods, the easier it will be to use them as collateral for a loan. Your lender will never want to find themselves forced to sell your goods if you were to default on loan repayments. That said, the easier it would be for them to recoup their costs by selling your luxury assets if this were to happen will serve as a benchmark of how easy it will be to borrow using your luxury goods as collateral.
When Enness know more about what you want to borrow and your assets, they will approach specialist lenders on your behalf. Lenders will want to know more about your luxury goods and, in many cases, will request high-quality photographs of your collection and more information about ownership. They will predominantly be looking to make a first “screen” of your collection and verify if it’s the right quality and calibre for them to lend against. They will also perform some basic due diligence. If they are satisfied in the first instance, lenders will then provide an in principle offer, and your broker will help you compare and understand the differences between any of the offers you receive. When you have an offer you would like to accept, your lender will draw up a term sheet for both parties to sign. At this point, lenders will also want to appraise your goods formally.