"They have belongings which they can just as easily monetise as security for loans but without the normal hoopla of intrusive forms, property surveys, credit and affordability checks."
We spoke to Ray Palmer, director at Suros Capital, about whether the adviser market is ready to recommend luxury asset lending and what have been the benefits and challenges of launching in 2020 amid the Covid-19 pandemic.
FR: As a new lender, tell us a bit about your proposition and what you can offer to intermediaries.
Suros Capital provides short term lending facilities specifically aimed at individuals looking to raise money quickly, secured against luxury assets such as fine art, luxury and classic cars, jewellery, watches and fine wine.
The intermediary market is the natural gateway to reaching customers needing finance. We are forging relationships with adviser firms which recognise that our proposition offers a credible alternative to conventional short-term funding needs when the priority is for a fast conclusion and normal sources are too slow or affected by bricks and mortar lending criteria constrictions.
FR: What would you describe as your main USPs in relation to more conventional forms of lending?
Suros’ proposition is particularly appropriate when access to immediate funding from one’s own resources is not available or takes too long to agree, while at the same time, the window to make that purchase or pay that unexpected bill is closing. There is a growing demand to raise short term capital quickly with the minimum of fuss and we aim to fill it.
All we need is the adviser to refer the client to our team. There is little paperwork, and we do the rest. Once the asset being secured for the loan has been assessed for value, funds can be released within 72 hours. The asset is then stored, the introducing adviser earns a fee and the customer can repay the loan plus accrued interest. Simple.
FR: Is the adviser market ready to recommend luxury asset lending?
There is considerable frustration among advisers and clients at the level of checks and paperwork surrounding conventional bricks and mortar lending. While there is a need to ensure the best outcomes for customers, there is no doubt that increasing compliance requirements for normal lending is becoming a barrier to the immediate funding needs of asset rich customers. They have belongings which they can just as easily monetise as security for loans but without the normal hoopla of intrusive forms, property surveys, credit and affordability checks.
FR: What have been the benefits and challenges of launching in 2020 amid the Covid-19 pandemic?
Principally, our funding is not dependent on bricks & mortar security and Covid-19 exposed some of the funding frailties of conventional lending. Even now, LTVs have still not returned to pre-Covid levels and the continuing uncertainty over property valuations and the understandable nervousness of valuers of being accused of overvaluing by lenders at a future date, if the current property bubble deflates, has seen a rash of failed cases.
Obviously, the lockdown has meant that physical engagement with intermediaries has been impossible but getting our message across thanks to the trade media and our own targeted email campaigns, as well as the widespread use of web-based technology, have proved to be very successful.
FR: What type of customer do you see will benefit most from your proposition?
In short, any adviser customer who has luxury assets of value, who wants short term funds in his account quickly with the minimum of fuss to pursue an immediate purchase or pay for a service or unexpected charge – like a tax call for example. Suros provides this service every day.
FR: How will attitude to lending continue to change as a result of the pandemic?
There are no barriers to our brand of short-term lending now. The only challenge is in taking our message to the maximum number of adviser firms and demonstrating just how effective asset lending can be. Advisers are understandably cautious around new concepts but once they see how lending against assets, other than bricks and mortar, without the usual workload that goes with making a conventional lending application, I can only see greater acceptance of what Suros Capital is offering.
FR: If you could read any headline about financial services in 2021, what would it be?
‘Lending sector leading country out of recession’.