Suros Capital, which lends against luxury assets, has reported seeing a growing trend for enquiries from brokers whose clients wish to borrow using classic cars as security against short-term financing needs.
Loan requests backed by the security of a classic or luxury car now represent up to 30% of enquiries for borrowings of above £50,000.
A recent request was received from a mortgage broker on behalf of his client, a lawyer, for a £200,000 bridging loan to complete a property transaction. With traditional lending sources unable to deliver, Suros was able to advance the sum required, secured against a classic Mercedes valued by Suros’ car specialists at £700,000.
The funding was agreed in principle immediately, subject to inspection, with the funds ready to be transferred to the client on his instruction. The whole transaction from enquiry to funds transfer was completed within three days.
Ray Palmer, director at Suros, has noticed a growing trend for classic cars being offered as security.
He said: “At this time of year, classic cars tend to spend the winter months kept away from the worst of our British weather. This type of car is a treasured possession and often, as in this case, kept in a secure, temperature-controlled environment, where our car specialists were able to undertake the inspection.
“As the car was not being actively driven at the moment, our client was able to make use of his Mercedes in a different way to help fill a funding gap and without the car being moved from its current location. Our broker partner who referred his client to us was delighted with the outcome.
“There is no restriction on how Suros funding can be used. With a Suros loan, not only is there little in the way of paperwork but also no affordability and credit checks or expensive legal and valuation costs.”