Looking for a quick $1 million?
Help is here for Big Apple high rollers: a new breed of upscale pawn shops is willing to trade cash for pricey personal items like jewelry, antique cars and fine wine.
The city’s first high-end pawnbroker, Borro.com, has loaned out millions to more than 15,000 well-heeled clients in its initial year, using their extravagant toys and valuables as collateral.
“We even have a Grammy in our vaults,” said Paul Aitken, the CEO and founder of Borro.com, who declined to identify the artist.
“A lot of our clients are young sports and entertainment people who are just starting their contracts and have some early liquidity problems until their big money comes in,” he added.
Bad economic times and skittish traditional lenders such as banks have left fertile ground for several high-end pawn brokers including iPawn.com. It typically hands out loans of around $100,000 to cash-crunched businesses or professionals.
Both pawn shops say they’ve won followings in their first year in New York because of the city’s abundance of luxury items, coupled with the Big Apple’s appetite for risk and sophistication about leverage.
The outfits — which operate in the privacy of referrals from financial planners and others — offer securitized loans at about half the cost of roadside hock shops where goods wind up on display and the loans are hardly enough to fund a Caribbean weekend.
“We can keep our interest [rates] incredibly low because we lend out more cash we’d otherwise pay in overhead,” said Ben De-Kall, the founder of iPawn.com and a former Lehman Bros. investment banker .
De-Kall, a Columbia MBA, said he knows the humiliation of having few places to turn after his lifestyle letdown following Lehman’s collapse.
“We’re working largely with business people who can’t get the financing they need,” said De-Kall.
He said one client, a doctor, got turned down by his banker for a quick loan to expand his practice. Within hours, iPawn.com wired $40,000 for his deal, backed by the doctor’s briefcase full of family heirlooms, diamonds and luxury timepieces.
Expanding across the US from its headquarters in Texas, iPawn holds banking licenses.
Appraisal of collateral — such as gems, precious metals and artworks — starts online through photos and videos. If a client is interested, he ships the valuables to Texas for a final valuation before cash worth up to 70 percent of the item’s value is wired to the borrower.
About 85 percent of the clients accept the appraisals. Cars and houses are too big to pledge, De-Kall noted.
Borrowers seeking bigger bucks — loans up to $1 million — can turn to Borro.com, which in turn requires substantial collateral such as antique cars, beach homes, a corporate helicopter and even a Babe Ruth baseball bat, said Borro.com founder Aitkin.
“We take on a lot of Warhols valued in the $300,000 to $500,000 range,” said Aitken, a former technology entrepreneur who sold his phone app company to help bankroll the UK-based Borro.com.
A typical recent loan for $24,000 was backed by a case of 1989 Chateau Petrus valued at about $38,000. It’s safe in climate-controlled vaults, where unclaimed treasures are rare, Aitken said.
tharp@nypost.com
New pawn shops court high-end borrowers
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New pawn shops court high-end borrowers
