High-end asset-secured lender Borro, based in the City of London, reports good business as custom from small companies grows.
Over the past ten months Borro alone has lent in excess of £20 million to nearly 1,000 SMEs and startups. On average, hard up Directors and owners of companies take out £26,000 in a go from the pawnbroker, putting up expensive items such as sports cars, diamond rings, antiques and Swiss watches as collateral.
The company's CEO, Paul Aitken, said "over half of Borro’s current client base is business owners and more than half of all Borro’s SME clients come back for further loans.”
Whilst the average representative APR on an unsecured loan from a regular bank is shown by money.co.uk to be at about four percent, the Borro website cites its representative APR at 82.2 per cent, making the drought in conventional business credit that much more costly for companies in need of capital.
Asset-backed business loans are common in Asian countries such as India, where banks are wary of dealing with new businesses due to instability in the private sector and rumored corruption in government.
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