Fine wine being pawned for cash in New York

20th August, 2013 by Lucy Shaw

The practice of using fine wine as collateral to secure short-term loans is gaining traction in New York.

Liquid assets: the Bordeaux first growths are being used as collateral to secure short-term loans

According to The Financial Times, investors in urgent need of money are resorting to pawning their bottles of Château Lafite and Château d’Yquem.

Paul Aitken, founder of Manhattan lender borro, told the FT that there had been a recent surge in the use of wine as collateral to secure loans of over US$100k at interest rates of 2.5-4% a month.

“The loans we are writing on wine are big. One bottle of Château d’Yquem had a loan offer of US$48,000,” he said.

At borro, whose clients include entrepreneurs in search of instant cash flow, the value of loans backed by fine wines stands at US$4m – double that of last year.

While admitting to the FT that borro’s business model shares “similar principles” to that of a pawnbroker, Aiken is keen to distance himself from the association.

“Most pawnbrokers don’t do this type of lending. They typically lend against gold and firearms. We don’t go near that stuff,” he told the paper.

In addition to the five Bordeaux first growths, Pomerol-based Château Pétrus and Burgundy’s Domaine de la Romanée-Conti are the wines most commonly used as collateral to secure loans through borro.

Borro provides fast loans of up to $1m on valuables including fine wine, watches, jewellery, luxury cars, fine art and antiques. To date it has funded loans to the value of $83.7m.

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletters

Job vacancies

Brand Ambassador – Santa Rita Estates

Santa Rita Estates
London or Hertfordshire but with flexibility to travel, UK

Sales Executive - Wine and Spirits Awards

The Drinks Business
Central London, UK

On-Trade Channel Manager

Delegat Europe Limited (UK)
London / Midlands, GB

Trade Marketing Analyst

Delegat Europe (UK)
London, GB

Key Account Executive

Delegat Europe Limited (UK)
London / Midlands, GB

Senior National Account Manager

Bibendum PLB
London, UK

ON-TRADE Sales Executive

Roberson Wine
London, UK

OFF-TRADE Sales Executive

Roberson Wine
London, UK

Judging Week Runners

Decanter World Wine Awards
ExCel Centre, London E16, UK

Sales Administrator

Les Caves de Pyrène
Guildford, UK

Retail Commercial Executive

Laithwaite's Wine
Theale, Berkshire

Wine Buyer

Conviviality Plc
Crewe, UK

Sales Account Manager - On-Trade

Berkmann Wine Cellars
Liverpool

Sales Account Manager - On-Trade

Berkmann Wine Cellars
M3/M4 corridor

Media Sales Manager - Hong Kong

The Drinks Business Hong Kong
Hong Kong

The Global Merlot Masters 2017

Deadline : 31st March 2017

The Prosecco Masters 2017

Deadline : 10th March 2017

db Awards 2017

Deadline : 28th April 2017

The Global Organic Masters 2017

Deadline : 3rd March 2017

Click to view more

The Global Sparkling Masters

the drinks business is thrilled to announce the launch of The Global Sparkling Masters

The Global Rosé Masters 2016

the drinks business is proud to announce the launch of the Global Rosé Masters 2016.

The Prosecco Masters 2016

Now in its third year, the competition will reflect the growth in popularity of this fresh and exciting sparkling wine from the picturesque regions of Veneto and Friuli.

The Global Pinot Noir Masters 2016

After the success of last year’s competition that judged over 250 wines from no less than 16 countries, the drinks business is proud to announce the third year of the Global Pinot Noir Masters

Click to view more