Borrowing against luxury assets: how people raise money on art, cars, watches and jewellery without selling

Borrowing against luxury assets gets owners, developers and business owners’ cash fast, without selling something that’s appreciating or irreplaceable. No disposal means no CGT providing you repay the loan, and no auction-house fees or slow sales. Lenders typically advance up to 80% LTV, depending on liquidity, brand and provenance. Art and watches sit in vaults or bonded warehouses; cars and yachts stay with you under chattel mortgages, with registered liens and GPS tracking. Private banks charge up to 8% a year, specialists and pawnbrokers charge up to 3.5% a month (a whopping 42% pa). Default, and the lender sells the collateral, takes its costs and returns any surplus. FX matters. Pledge USD collateral against a GBP loan and you carry cross-currency risk. If the asset’s currency weakens, expect a margin call. Multi-currency facilities and natural hedges help. Done properly, you get discreet capital in as little as 24 to 72 hours, with your long-term portfolio left intact.

Some of the richest people are also some of the most indebted. They might own a £5 million house, a Ferrari or a priceless art collection, yet struggle to find £50,000 in cash. Being wealthy on paper doesn't mean having money in the bank.

Borrowing against assets such as art, jewellery, classic cars, or yachts can provide liquidity without requiring a sale. Lenders may advance 30–70% of an asset’s value, with specialist borrowing often costing 6–20%+ annually. The lender may retain possession of the asset, and default could result in its loss.

Portfolio finance is also becoming increasingly relevant. Borrowing against investments can provide access to capital without selling assets or triggering CGT. Rates may range from 5–9%, but falling markets can lead to margin calls and forced sales.

The risk is not borrowing while wealthy, it's being wealthy on paper but lacking liquidity to service the debt.

Leverage can help preserve wealth, but poor liquidity planning can quickly erode it.

Borrowing against a luxury asset can serve a very practical business purpose. We recently reported on a Surrey developer who raised £200,000 through Suros Capital against Rolex and Patek Philippe watches to complete a refurbishment. Suros said the collection had already been valued for an earlier loan, allowing funding within 24 hours.

We’ve also covered a £125,000 loan against fine wine to fund renovations where the borrower already had property bridging finance.

These examples show how a collection can provide another source of security when a project needs funding. But retaining ownership is not the same as retaining access to the item, and borrowers need to understand the full cost and what happens if repayment is delayed. In the Surrey case, repayment was planned from the property sale.

The tax reason to borrow against a luxury item rather than sell it is real, but it's narrower than it sounds. It helps an owner whose art or jewellery has gone up in value, because selling can bring Capital Gains Tax, while borrowing against it isn't treated as a sale. Most private cars and watches are free of that tax anyway, so for those, tax isn't a reason to borrow rather than sell. What lenders will lend and charge is for them to say, but the tax risk to watch is a loan that can't be repaid. If the lender sells a painting or a ring to get its money back, the tax rules treat that as the owner's own sale. So the owner can owe tax on an item they've lost, with the sale money gone to clear the debt. If Capital Gains Tax is due, the owner has to report the gain, and the tax is normally due by 31 January after the end of the tax year. With art or jewellery, any tax on a forced sale is part of the cost of the loan.

The wealthy are not always liquid. Entrepreneurs, collectors and property owners may have millions in assets but little cash. Borrowing against a painting, classic car or watch can release liquidity without selling, avoiding capital gains tax or losing a cherished asset.

Lenders typically advance aorund 50% of assessed value for art, watches and jewellery, though this varies. Cars and yachts qualify, though depreciation complicates matters. Specialist lenders may hold smaller items; private banks may let clients keep them, subject to insurance and security.

Rates vary widely, and short term specialist lending can be costly. Default may mean a forced sale at a poor price.

Borrowing makes sense for a temporary need with clearly funded repayment, less so to sustain a lifestyle. The key question isn’t how much a lender will advance, but how you’ll repay it.