Decanter World Wine AwardsLoan company to use wine as sole collateral
- Tuesday 1 November 2011
Grange vertical: loan to buy
Loan Against, an arm of Prestige Asset Finance, is offering loans of up to 70% of the value of blue-chip wines, with no other collateral required.
According to the company this is ‘the world’s first non-recourse, non-status wine investment loan, enabling private investors to [Bordeaux] buy premier crus…and other wines of distinction…’
Managing director James Constantinou said, ‘We create instant liquidity for UK and offshore-based investors who are looking to acquire fine wine at auction or through private sale.’
Spokesman Mark Fielding said the system is unique for wine because it requires no credit check, and money is advanced using the wine as sole collateral.
Loan Against will provide tax-deductible loans of between £100,000 and £10m for purchases of wines including Bordeaux First Growths, super seconds, top Right Bank wines, Sauternes, top Burgundies, Penfold’s Grange and other blue chip properties.
Loans against en primeur wines are not possible at the moment due to the ‘risky’ nature of that market, but it is something that ‘might be entertained in the future’.
At the moment, Fielding said, the company is looking to loan a private buyer £100,000 for a complete vertical of Grange, 1951-2006.
Rates start at 2.49% per month, payable at the end of seven months.
Have your say!
Joe King
August 30 17:03
I believe the interest rates offered by the other collateral lenders mentioned: borro and Newbondstreet PBs, who incidently DON'T provide acquisition loans to fund the buying of fine wine, are a lot higher than Loan Against's whose rates seem reasonable enough to me depending on your margins and your ability not to pick wines with little growth - they don't claim to be brokers of wines just collateral lenders. Bordeaux Cellars as far as I understand offer a completely different type of finance e.g. for pooled investments and not for clients to make individual purchases with, which Loan Against's finance package provides i.e. autonomy.
Wineyields.com
November 04 18:28
This lending would have produced losses on 4 out of 5 Latour vintages based on their average growth rates over the past 5 years. And the fifth vintage would have been a loss vs pure equity funding.
We have an article on our site with the numbers and further perspectives.
Henry Portman
November 04 15:58
Sounds like 'Sour Grapes' Stephen.
Stephen Burton
November 03 12:55
I am astonished that anyone could consider taking on a loan at a minimum monthly rate of 2.49%. That any purchase financed by such a loan can be described as an investment is just beyond belief.
At these rates on a 70% loan to value, interest would consume the equity in a year leaving nothing for the investor. Loan Against are simply pawnbrokers and not “Asset Managers”. Neither are their terms unique: Borro.com and New Bond Street Pawn Brokers offer similar packages.
Bordeaux Cellars have arranged finance on much better terms for their clients for over a year now. This has been so successful that our financial partners have recently decided to extend their offering to wines already owned by investors and collectors.
And another thing, the loans offered by Loan Against are said to be “tax deductable” but who is expecting to pay any tax on their wine gains at all let alone intending to mitigate it by running up debts at these extortionate rates.