When faced with a need for liquidity, owners of luxury assets often default to the idea of selling. However, selling comes with distinct disadvantages: transaction fees, consignment wait times, and—most importantly—the permanent loss of the asset.
The Advantages of a Collateral Loan
- Retain Ownership & Upside: You keep the investment potential. If your Rolex Daytona or Warhol print appreciates in value during the loan term, that gain belongs to you, not a dealer.
- Speed of Execution: Consigning an item can take months. A loan with New York Loan Company is often funded in under an hour for jewelry and watches.
- Tax Efficiency: Loans are generally not taxable events. Selling an appreciated asset may trigger capital gains tax. (Note: Always consult your tax advisor regarding your specific situation).
- No Credit Impact: Because the loan is secured solely by the asset, there is no credit check and no reporting to credit bureaus.
For clients who believe in the long-term value of their collection, a pawn loan is a strategic financial tool that bridges the gap without breaking the portfolio.
