Luxury Asset Lending on The Rise – Our Comments in Financial Times

Luxury asset lending can provide an alternative source of finance for individuals who hold significant wealth in valuable assets but prefer not to sell them in order to raise capital.

High-value assets such as classic cars, fine art, jewellery, watches, fine wine and yachts can, in some circumstances, be used as security for borrowing. This can be particularly relevant for business owners and other asset-rich individuals whose wealth may not be held primarily in cash. Learn more about mortgages for business owners.

Enness works with clients seeking more flexible ways to finance property purchases by borrowing against existing assets. Depending on the lender and the asset involved, finance may be structured around a wide range of valuable holdings, including significant art collections and other luxury assets.

The value and suitability of an asset will typically be assessed carefully. For fine art, lenders may consider factors such as the artist, provenance, rarity, condition, market demand and comparable sale prices, alongside information from galleries and auction houses.

Security arrangements can vary depending on the lender and asset type. Some facilities may require the lender to take physical possession of an asset for the duration of the loan, while others may allow the owner to retain possession subject to agreed security and insurance arrangements.

Luxury asset finance is often structured on a short-term basis and can provide access to liquidity without requiring the immediate sale of an asset. However, borrowing terms, interest costs, loan-to-value ratios and valuation requirements can differ significantly depending on the asset and lender.

Where assets remain in use or on display, additional agreements may also be required to protect the lender's security interest. For example, valuable artwork held by a museum or gallery may be subject to restrictions on its movement during the term of the facility.

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