One lender-to-the-rich in NYC tells the Financial Times that borrowers aren’t just bringing in a $50 bottle of something nice in exchange for cash. Instead, they are using their vino to back short-term loans ranging into the six figures.
“The loans we are writing on wine are big,” the lender tells FT. “One vintage bottle of Château d’Yquem had a loan offer of $48,000.”
He says his business has already done $4 million in wine-backed loans this year, up from $2 million for all of 2012. The loans typically have interest rates of between 2.5% and 4% per month.
“Most pawnbrokers don’t do this type of lending,” he explains. “They just don’t. They typically lend against gold and fire arms. We don’t go near that stuff.”
Now if you’ll excuse me, I’m going to see if I can trade in my rare bottle of Whitesnake red for half-finished 2-liter of store-brand cola.
Fine wines pawned for ready cash [FT.com]
Fine wine being pawned for cash in New York [The Drinks Business]