Suros Capital, a specialist in short-term lending against luxury assets, has reported a significant increase in clients using gold as collateral for loans.
The number of gold-backed loans has risen by 35% compared to the same period last year. Ed Blackmore, Business Development Director at Suros Capital, attributes this uptick to the rising value of gold and the economic climate.
“Gold has traditionally been seen as a safe investment, especially in times of economic uncertainty,” said Blackmore. He noted that the versatility of gold, whether in bullion, Krugerrands, coins, or jewellery forms, makes it an attractive asset. “With the price of gold having gone up by 15% in the space of a year, we are able to reflect gold’s increase in value with LTVs up to 75% for gold items. Clients are therefore able to borrow more, hence the increased interest in using gold as security.”
Blackmore also highlighted the practical benefits of gold as security. “Not only is gold being valued higher, but because in the form of jewellery or coins it is easily carried to our London offices which in turn results in immediate appraisal and valuation and therefore funds can be released in hours.”
One illustrative case involves a property developer who, unable to secure additional finance against his property portfolio, turned to his gold collection on the advice of his mortgage broker. By leveraging gold coins and Krugerrands, he secured a loan amounting to a 75% loan-to-value ratio — approximately £83,000. The funds were available in his account within 24 hours of his initial inquiry. The short-term loan, intended to be repaid from property sales, has a notional term of seven months.
