In a nutshell, what does borro do?
We provide people loans secured by personal assets, including jewellery, watches, fine art, antiques, luxury cars and fine wines.
Where did the idea come from?
I had the idea towards the end of 2008 when the credit crunch had started to hit. It was very clear that people needed an alternative way to address opportunities and manage cashflow issues. It was also clear that we had been on a spending spree for 20 or 30 years, and one of the things people had been acquiring during that time were the assets they’d been left with. So I basically thought it was a good idea to provide people with an opportunity to use those assets to get loans.
When did you start up?
How has it gone so far?
It’s gone very well. We have done about £55m worth of lending to date. This year, we should do about £25m with a turnover of £13m and broadly speaking, we are doubling in size each year. So we are growing well, and expanded into the US market about 18 months ago.
What has been the biggest challenge so far?
I would say the biggest challenge has been acquiring customers and building the required levels of trust, because we take possession of our clients’ assets during the course of the loan. These are emotional and luxury assets so a lot of our growth comes from people just monitoring and knowing we have been around for a period of time.
How does borro differentiate itself from the competition?
We have got quite a unique spot in the market. I think the ways in which we differentiate ourselves are on speed – we can write loans the same day – and the fact that our diligence is on the asset rather than the individual so there is no credit checks or credit risk. In addition, getting a loan from us is lower cost than selling an asset, if you are borrowing for six months or so. If you sell through an auction house or auction site, you have got pretty hefty commissions to pay. If you sell a watch to a jeweller, they have a model that means they have to make a very healthy mark-up when they sell on. So our cost of interest is lower than selling, even if you are borrowing for nine months – but most people are borrowing for four or five.
What has been the best decision you have made to-date?
I think that the way in which we operate means we are pretty good at turning products and services that we deliver on an opportunistic basis into a mainstream part of our offering. As an example, when we started, we just lent against jewellery and watches. We then broadened the range of assets we lent against to cars, fine art and antiques and this enabled us to address a different segment of the market. Because we are addressing those types of assets, we are now getting referrals from private banks, wealth managers and financial advisers.
Where do you see the business in 12 months’ time?
I would expect us to double in size over that time, and expand our footprint in the UK and the US. I think that we have got big market opportunities in both markets, so I really do just see us scaling what we are doing further. And I think one of the key things to help us scale is going to be introducing new product lines.
If you had one piece of advice for entrepreneurs, what would it be?
Just get on with it. You have got to have a good idea, but the best way of learning is to do, rather than to theorise.