Chicago-headquartered asset manager Victory Park Capital (VPC) has provided a £67 million (€112 million; $81 million) loan to Borro, a personal asset lender with a presence in the UK and the US.
The new funding line will help Borro, which launched in the UK in 2009 and the US in 2012, meet increasing UK and US customer demand for large-scale personal asset loans, the company said in a statement confirming the deal.
At present, its lending business is proportionally split 60 percent in the UK and 40 percent in the US. The expectation is that this will be more 50:50 by the end of the year according to its chief executive Paul Aitken. “The US is just a bigger market and we expect to see very strong growth there,” he said.
“This new lending line represents the confidence the market has in our business, and in Victory Park Capital we have a very important partnership that provides a significant new lending capacity,” Aitken added.
VPC has provided a pure debt solution to Borro, in what is believed to be VPC’s first foray into Europe. VPC declined to comment on the deal beyond the statement.
The financing reduces Borro’s costs by about a third, Aitken explained, adding that VPC were also able to offer more flexibility than other lenders consulted.
The company has conducted more than £70 million of lending since inception, disrupting the traditional pawnbroking market in the process, it said. At least half of that amount was lent in the past year, explained Aitken, reflecting a marked uptick in business.
Borro’s average loan value is £7,000 but can range from anywhere between £1,000 and £2 million, depending on the asset. The company focuses on providing liquidity to individuals, entrepreneurs and business owners who use luxury personal assets such as watches, jewellery, supercars, fine art and even high-end handbags as collateral for the loans.