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Fine art used to secure credit for wealthy in need of quick cash

The Momentum UK Team 23 November 2012

Privately owned fine art is increasingly being used by wealthy Britons to finance loans according to the lender Borro.

Borro are not alone in suggesting such a shift either. Earlier in the year UBS, the swiss based global finance services company sought to change the way they provide brokering options to their clients. Megan Stinson, a UBS spokeswoman claimed via Reuters that requests from brokers and a ‘significant investor appetite’ had motivated the change.

This appetite to borrow against the value of famous artwork is becoming increasingly popular, with the UK based lender citing a 21.7% increase in loan value of fine art since the previous year.

Borro have revealed several items of artwork from famous painters and sculptors alike. Hidden in underground vaults in London's Chancery Lane are pieces including a Henry Scott Tuke Landscape, secured against a loan of £34,000 and Andy Warhol prints with a loan value of £24,000.

Pieces that Borro have also held include work from artists such as Kyffin Williams, Damien Hirst, Montague Dawson and Jack Vettriano.

Paul Aitken, CEO of Borro said:

"We have seen an increasing number of high net worth individuals lending against fine art amongst other assets for liquidity.”

Of the items revealed by borro, the highest value was a piece by the late English sculptor Henry Moore. Famed for his large scale semi-abstract bronze statues, the loan value is set at £50,000.

Some may feel that borrowing against such famous pieces of work is dangerous considering their monetary, and cultural value. But Aitken believes that loaning against these items means that owners do not have to sell them.

“People do not want to lose their assets by selling and also recognise that they can access quick finance by coming to us. The vast majority of our customers redeem their assets"

Momentum