Cash-strapped oil executives are using expensive watches, jewellery and even cars as collateral for short-term loans as the “posh pawn” market takes off in Aberdeen.
Business is so good in the north-east just now that one Scottish company specialising in high-end secured loans plans to set up shop in Europe’s energy capital.
Neil Mitchinson, director of Edinburgh Asset Finance (EAF) said he was seeing growing demand for his services from clients in and around the Granite City.
He added: “We got a luxury 4×4 from Aberdeen only last week.
“The owner … had a short-term cash flow need but understandably wanted to remain anonymous.”
Mr Mitchinson has a warehouse in Edinburgh full of Ferraris, Range Rovers, Porsches and other expensive cars which are being held as security for financial quick fixes.
He said the oil and gas industry downturn was driving an increasing number of people from the north-east “from riggers to people working at senior management level” to cash in on their valuables.
Among the first items to be sacrificed are expensive watches made by the likes of Rolex, Breitling, Cartier, Panerai and Patek Philippe.
Mr Mitchinson said high rollers in Aberdeen were mostly pragmatic about their need to realise cash in a hurry through upmarket pawn, borrowing against items which they can live without for a little while.
“It is no secret that the local economy up there is going through a bad spell,” he said, adding he was currently looking for suitable office space in the Granite City.
Mr Mitchinson said his business – authorised and regulated by the Financial Conduct Authority – was a world away from the high street pawnbrokers and payday loan companies which charge exorbitant interest rates.
EAF offers seven month loans from £1,000 to £250,000, with interest rates typically ranging from 3% to 7%.
Cash has been secured by items including original oil paintings and other high-end works of art, fancy cars and even a shooting estate.
“These are things people treasure and they want them back,” Mr Mitchinson said, adding his customers nearly always returned to retrieve their goods.”
The world of high-end, asset-secured lending – upmarket pawnbroking – is the subject of Channel 4 TV show Posh Pawn.
The programmes have featured a former Miss England wanting to trade in her diamonds for a new life and a “Soho legend” giving up her collection of vintage Chanel handbags to finance her latest Botox procedure.
Luxury pawnbroker James Constantinou and his TV show team have also highlighted how people have turned to mini-submarines, helicopters and even a slice of Royal wedding cake to get them out of a cashflow crisis.
Mr Constantinou, who runs Prestige Pawnbrokers from offices in London, Richmond, Weybridge and Manchester, said it was no surprise to see some people in the oil and gas industry turning to their assets in a time of need.
He added: “We have been getting a number of calls from Aberdeen lately.
“I am not too aware of what is going on up there just now – all to do with oil I think – but it does seem to be fertile territory for our business.”
Using cars, jewellery or other valuables – Prestige has even had people bringing in aircraft – as a means of securing a short-term cash loan is a popular option for clients who want to avoid the hefty arrangement and management fees often associated with traditional banking, he said.
Recommended for you
