Beating The Great Resignation of 2021: How A Luxury Asset Loan Can Keep You Going While Searching For New Work
The pandemic saw mass resignations among working people as businesses found it extremely difficult to pay salaries due to low cash liquidity. This great resignation of 2021 saw people put in resignation letters due to a force of nature never seen in recent history, and as a new array of remote work opportunities picked up. Governments tried their hardest to mitigate the effect of rapid unemployment by giving out stimulus checks and helping businesses to support their workforces. This did not, however, change many of the fundamental issues brought about by the pandemic – especially in terms of transport and people being forced to work from home, something that’s just not possible in certain industries. This led many to explore other options and ways to work from home, triggering a wave of resignations.
If you’re a business owner, it is of paramount importance to have some cash in hand at all times, as it can be used to pay salaries/wages, pay bills and maintain the business infrastructure. A reduction in business volume can severely impact revenue, but there is a silver lining. Luxury asset financing is the way to go if you are looking for some quick cash in hand to keep your business afloat. However, this isn’t only useful for business owners. For an individual, a luxury asset loan can help them sustain for a lot longer while they are searching for new earning avenues.
Most people seldom realize the untapped resources they already possess. These can be collectibles or heirlooms handed down in the family. But it could also be a vintage car that has been lying around in the garage, old luxury watches, or jewelry.
Luxury Asset Financing – What To Know
As the term suggests, this is a type of loan where cash is given by the lender to the borrower in exchange for a tangible valuable commodity. In the world of luxury asset loans, nothing is ever out of bounds. Any kind of luxury goods like a luxury car, yacht, classic car, probably a luxury watch, or even luxury handbags are considered collaterals while applying for such a loan.
There are a few features of secured collateral loans that make them the preferred option for short-term financing over conventional bank loans, and they are arguably their biggest advantages against bank loans as well.
Luxury asset loans, or any type of secured loans, are given against collateral as discussed above. But these collaterals aren’t simply limited to luxury goods. These loans can be secured against a wide range of assets. You can also use real estate as collateral, businesses can use their machines and other equipment as collateral, and so on. Even precious metals and jewelry can be used to secure a loan.
Why Choose Collateral Lending?
For collateral loans to be the preferred option of short-term loans, they have to have some clear-cut advantages over conventional bank loans.
The biggest advantages come from the fact that these loans are secured, and since they are backed by tangible assets, their interest rates are lower than conventional bank loans. Typical bank loans tend to have higher interest rates because they are unsecured, and they need to stay in clear waters in case the borrower defaults on the loan. With collateral loans, this becomes a non-issue.
These collateral loans require no credit checks, meaning any borrower, irrespective of the credit score can apply for a loan. Conventional loans can sometimes have strict credit requirements which may deter many borrowers from even applying for a loan. But as these loans are backed by your assets, credit check is not required and the loan can be processed without a hiccup.
This brings us to the next advantage. Since these loans do not require a credit check, and are also secured, the processing times are quicker than conventional bank loans. For regular loans, banks might have to do a hard credit pull even for smaller loan amounts, not to mention that these loans typically come with higher interest rates and less-than-favorable loan repayment terms. All these background checks take some time to complete, increasing the processing time of the loan itself. However, in the case of a collateral loan, these background checks are not necessary, and all it takes to process a loan is an asset as collateral. This is extremely beneficial if the borrower is in urgent need of money and can’t afford to waste time on unfruitful background checks.
The loan amount in any collateral loan is limited by the value of asset that you’re keeping as security. This means that you as a borrower have increased freedom when it comes to the amount which can be loaned. Typical bank loans may limit the loaned amount based on your current credit score and your credit history, which might be lower than what you expected. With luxury asset loans, you can keep as many assets as security as the situation requires, and get a higher loaned amount than what a bank loan might offer.
Luxury Asset Loan Benefits
- Addressing cash flow issues
- Quick approval process
- Tapping into assets that are just sitting around and use cases/examples for all three
Getting a Loan – What You Must Do
Right, so have finalized on getting a collateral loan. The next, and the most important step is to get your asset valuation done. This is important as it will eventually determine how much the loan amount will be. Valuation of any kind of asset is typically done by appraisers, who will look into the various little details surrounding the asset and then come up with a market value. In case of luxury goods, they typically look at the brand, the year of manufacture, the condition of the asset and its rarity or exclusivity. Appraisers are different for different assets, as it’s not a good idea to let a jeweler set a price on a vintage luxury car, which may have dwindling effects.
A second opinion can also be sought, as it will help you fix a price on your luxury asset. This can also be used to make sure that you’re getting the true value of your items and aren’t being ripped off by unscrupulous lenders. Different financial services will offer a different loan amount as a percent of the actual market value of the asset. Therefore as a borrower, a little research will go a long way in helping you get the best deal for your luxury items.
With the pandemic becoming a part of our lives now, things will soon return to normal. This normal, however, can be anything from a few weeks to a few months. With a high number of layoffs throughout various industries, once things start to smoothen out, we may see a steady rise in employment rates again. Call it a “loan for unemployment” if you may, a luxury asset loan can help you get through the rough seas until you get to the clear waters of employment again. If you’re a small business looking to increase its short-term capital, keeping some of the business assets as collateral can go a long way in keeping your business afloat.
Whatever the case may be, Vasco can help you get the best loan offers for any asset. We have in-house appraisers that can get you the best market value for your assets, and with our years of experience in providing high-end luxury asset loans, you can be sure that you’re getting the best loan amounts with the lowest interest rates. Come visit us at our branch to know the various financing options we have for our clients!