Personal asset lender Borro has revealed that some clients are using luxury bags from the designer as collateral for loans.
In response to popular demand, Borro launched its service offering loans against handbags from the French fashion house Hermes in December 2013 and it says business has flourished since.
“ast week, a client in London bought a Hermes blue crocodile skin Birkin bag, with a value of £40,000 new, to Borro and secured a £16,500 loan, while in the US, Borro worked with one client to lend $30,000 against another Hermes crocodile Birkin bag.
The lender says these types of loans are not unusual as it has seen other clients borrow £12,500 for school fees against a burgundy crocodile Hermes Birkin bag, and another who borrowed £10,500 against a slate grey crocodile Birkin.
Since launching this proposition in December last year, the lender has issued £210,000 against designer bags, with an average loan value of £9,000. Using both in-house and external third party valuers, Borro authenticates and values the handbags, and offers clients up to 60% of the market value of the bag based on its condition and age, as well as market desirability.
Samantha Lilley, director of valuations at borro, said: “The classic designer bag is very collectable, especially to the fashionista. The Hermes Birkin bag in particular is exceptionally sought after, but buyer beware – there are myriad fakes and replicas flooding the market, from the primitive to the exquisite.
“Provenance is imperative when purchasing so always buy from authentic dealers and respected auction houses.”
Paul Aitken, founder and CEO of borro, added: “The luxury handbag market is not only high growth, but a global market that is synonymous with our wealthy clientele.
“We decided to add high end handbags to our asset classes to match demand for loans against these assets, and have seen clients capitalise on the service ever since. One came to us with a vintage Chanel 2.55 handbag which she used to secure funds for launching her own online business. All the handbags we lend against are checked and authenticated by an internal and external authority to make sure they are the genuine article, and if possible we ask for proof of purchase too.”
