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Being short of ready funds is no reason your client has to miss out on a great investment opportunity. Even if the banks won't help, there are alternative ways to access funding.
Does your client have other valuable assets, such as a fine art collection, or luxury yacht? According to ABS data, the average value of an Australian household’s home content is $61,000. This may include works of art, heirloom jewellery, luxury watches and collectibles. High net worth individuals may also own other valuable assets, such as classic cars and yachts.
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One option is to liquidate these. But there are three key issues with doing this:
1. Time
2. Sentimental value
3. Appreciation
Auction agony
The auction process for valuable assets takes several months: far too long if there’s a must-have opportunity suddenly before you. Plus there are hefty auction fees to consider.
There’s also no guarantee of a sale, or of a good price. No investor wants to have an effective fire sale of their valuable assets to invest elsewhere, it makes no sense.
Holding on
Many investors also want to hold on to their valuable assets. The investor may also be a collector, with a personal passion for the assets they own. People want to keep heirlooms in the family, and pass them down again or they may want to take a holiday on their yacht next year, rather than sell it.
Alternative assets are often held for the long-term, and may soar in value if you can hang on to them. Art collections in particular tend to appreciate over the long term, as do other vintage items as their scarcity and antiquity value grows.
Alternative assets
A new way to realise the value in the assets a client already has, without having to let them go, is personal asset lending. This lets you raise funds against valuables that the banks won’t touch.
For mortgage brokers it’s a great tool to help clients access money in a fast and secure way. Loans can be offered and settled in just 24 hours. There’s no need for income or credit checks. It's an ideal solution for bridging finance to complete a property deal, take advantage of a unique investment opportunity, or, a short-term capital injection into a SME, or unique investment opportunities such as buying shares in an IPO, or simply to address unforeseen cash flow irregularities.
Loan limits
Even when property-secured loans are still an option, major banks have currently been reigning in the maximum LVR allowable for residential properties. These lower maximum loan limits may not appeal to investors, particularly they want to borrow as much as possible for a tax deductible loan. Personal asset lending can help close the gap.
Even when a client does want to actually sell an asset, it can still be convenient to get a sale advance.
Personal asset lending is 21st century finance. The GFC permanently changed the face of funding, and banks across the world have their hands tied with stricter guidelines. This offers vital liquidity to stimulate investment and opportunity.
Steven Beinart, co-founder Assetline
Steven Beinart is the co-founder of personal asset lending specialist Assetline. He has over twenty years of international senior management and board experience in the facility services, healthcare and personal care Industries
