Borro is an upscale pawn shop based in New York that allows people who own luxury items to get short-term secured loans without the need of extensive paperwork, or even as much as a credit check. The company was launched in London in 2008, and since 2012, also operates in the United States.
Borro accepts a wide range of assets as security for short-term loans. Acceptable assets include jewelry, watches, precious metals, luxury cars, fine art, antiques, fine wine and luxury handbags. The loan amount is based on the value of the asset, which remains in the possession of the lender until your repay the loan. If you don't repay the loan, your assets will be sold to cover the loan and pending interest. Any surplus from the sale is returned to the client.
Borro will lend you anything from 30% to 70% of the market value of the security, depending on the type of asset you pawn. The minimum loan amount is $5,000 and the maximum amount is $5 million. The maximum term is 36 months, but the loan can be extended if all interest payments are current.
Rates range from 42.41% APR to 79.38% APR. In California, the maximum rate is 79.38% APR. You also must pay a storage and insurance fee of 3% to 5%. Your specific rate will be determined by the asset used as security and the size of the loan. The larger the loan, the lower the rate.
You can apply online or over the phone. Then you send the asset you wish to pawn so it can be appraised. If it's not practical to send it by courier, Borro's appraisers will travel to where it is stored. If you agree with the loan amount and rate, approve the loan and the funds will be wired to your bank account.
Borro bridges a previously vacant niche between pawn shop and bank. A traditional pawn shop may work fine for a small loan of a few hundred or even thousand dollars, but will probably not be much good for clients looking for larger loans. Similarly, traditional lenders will generally not provide large unsecured loans without proof of liquid assets. Although Borro's short-term loans are not a long-term financial solution, they provide a discrete source of cash for people with not-so-good credit histories who need large sums of money pronto.