Original subtitles

If at the end of the loan, we're going to have to sell your Ferrari or your beanie.

But that's the worst case scenario, of course, as a basis.

I mean, we don't want to sell people's goods.

So I never wanted to set this business.

That would be a shock and people used to think, oh, we're the whole bird,

but you know, he's going to get his hands on my goods and he's going to

set it and there's going to be, that's not the case itself because once

you set it up and we've lost that.

Now we spent hundreds of thousands on marketing to get these

guys to come in with a dude's

welcome to how to lend money to strangers.

I'm your host, Brendan, the Grange.

And today I'm discussing one of the more interesting business models we've covered.

And if you don't believe me, just look for the channel four documentary

posh porn, a behind the scenes.

Look at today's guest procedure porn, bro.

When I was a kid pawn shops where something you saw on TV shows, maybe

a cop trauma, where somebody was trying to sell some stolen goods.

And when I started working, at least in South Africa, they were never considered

part of the formal lending economy.

There was something I didn't really think about.

And so I guess I moved to Asia in Hong Kong.

They're red and green neon signs or.

But if I remember correctly, it was first the Philippines that I actually

encountered them as a potential data source as a formal lending organization.

But even then I would have regarded them as lenders of last resort.

What we're going to talk about today is a very different porn business,

James Constantino, and his team at prestige porn brokers serve a very

different clientele to the stereotypical.

As we'll hear after the break, they're issuing loans against

everything from helicopters to Lamborghinis to design a hammer.

So stay tuned to hear about how to turn assets laying around into accessible

cash and why consumers might want to do that instead of going to their bank.

James generally, when I'm interviewing a leader in a lending business,

they have a corporate background.

Maybe they were in a bank, maybe they're a management consultant, but typically

they wore a suit in an office for awhile.

Your background is very different to that.

About what I saw, you know, I'm sitting into that, but I try and it's on a budget.

I'm not from that filled with your life.

It's not me.

And that's probably why I'll come up with the concept for prestige.

It came on the back really of the crash, about 2009 Lehman brothers, uh,

banks tightening up lending criteria.

Uh, I was in property development prior to that, I used to do it in classic dolls.

I sort of dabbled in a few things.

I had friends that were in zoology, another friend of mine.

It was into wine and us sort of sitting there one Sunday was reading

the times and it was, uh, there was an article about asset lending in America.

Not for, well, this is quite interesting.

And you've got bar bench, Europe.

Uh, I think I've got quite a few skills.

If you like academically, I came a from school with zero because I was

asked to leave at the agency thing.

Well, I had a lot of common sense I've been willing.

And then since I was a kid and I started thinking about the other

assets that you could possibly memoir people, lending events, cars,

or one or boats or airplanes, or pretty much anything, what restricts.

And really sort of started premier, to be honest with you, the banks inability

to function fully in 2009, never pulling the rug out from under some

really good people's Finn people that were all flying through development

sites are having their lungs pulled in.

We were in stories of doom and gloom.

You know, I have friends of mine, that'll play golf with a bank manager the day

before, but then the bank manager was talking to them in the morning saying

this is that 25 pound overdraft you've got, it's going to have to be really paid.

And I thought, well, this is actually quite a good time to

start this business because people call get their hands on money.

They have had quite a few years of growth.

They both got an old bond from Sally, but it's not rain drug was for all people with

expensive pieces about wine collections.

Uh, wouldn't it be great to secure a lot of these and some of these assets

and that's really had it will stop.

Did you say your background's not typical of a banker or a lender in a similar way?

Prestige and pawnbroker broker together, not unnatural, natural

pairing to most people, but you've really changed that game.

You talk about art and wine and luxury.

Acknowledging the fact that these assets exist, people have them,

people want to keep them and you can lend against them rather than

forcing somebody to sell and rebuy.

And you've obviously seen the market respond to that.

So when we first thought about it, I was really more concerned

about the contractual side.

To be honest with you, how could I do this legally with a tight

contracts in the UK, London.

And I thought, well, actually pawnbroking is already sets out.

All we had to do is swap the word gold or fob watch for piece

of art, basically all for art.

And that's exactly what we did.

I had a skill set around me.

I mean, if someone presents me with something, I like to think that

I'd be able to value most songs and that skill has been enhanced for

sure, with prestige and the volume of these assets that we've seen.

So obviously we consulted our experts, but they were quite keen to get involved.

Do as well.

Funny enough, because this is a new idea for them.

So they were things that helped out.

Going back to your point.

I think the issue for us was actually getting the message

out because people didn't know.

When I sold Christine's pulled Burke is above my little shopping wine bridge.

They didn't really know what it meant.

I knew it meant prestige.

I am Paul think, but I didn't understand the asset policies

that we were talking about.

Getting that message out was key to success.

The BBC world news, for example, did a feature on, so while on the

show we were featured in its time.

So once the press called and it was quite skeptical of that to help, to sort of GABA

price, if you like, and then obviously a channel for commission, propelled

us into another stress of spending.

Yeah.

And I we'll pick up on that cause I I've got hooked on it.

Well, uh, doing some research, it's a really great show, but before we

get there, I think you talk about the message and I think it's one that

would be the first reaction to anyone listening now for the first time.

And they might say, well, why would somebody who owns a Ferrari.

Neat to porn of need alone against wouldn't.

They just have cash lying around, you know, does a first reaction I had, but

then I remembered know I've been doing Shay back loans for ages, you know?

Yeah.

Yeah, people have a shape portfolio.

They want to keep the shares.

I think they're going to grow in value, but they want to use them as security.

Or you've mentioned in the states, you know, various forms of asset bank

lending is you say it in your intro.

This is not all that different.

This is just, I guess, working around that heritage of the name pawnbrokers

and getting people to understand that it's not maybe what they think

it is when a borrower comes in, when somebody wants to pawn an item for

a loan, what is that process like?

And from your experience, obviously everyone has a different story,

but why are these customers coming to you for a loan rather than

using savings or going to a bank?

Yeah, it was quite surprising to, to me at the beginning.

When the wheels fall off and the car stops and your business has dried

up, you're not making as many sales.

The high street is see whatever it is.

You need cash, regardless of whether you go for are, you still need to put

bedrooms the same way as everyone else.

It's very rare for people in business to have millions of pounds sitting

around in a bank as a reserve.

I don't think that is a function.

And I don't believe that there's many, many millionaires and

entrepreneurs that sit on passion.

Not one, to be honest with you.

You talked about the show on channel four.

And I think it is really well, it's an entertaining show in its own.

Right.

But you know, you realize that some of these assets are sentimental things

that if you sold, you would never get back or they're appreciating

collectors items that go up in value.

So, you know, again, you don't want to resell and have to buy

in later, but what I also note.

There's a lot of entrepreneurs coming in.

A lot of people, who've got a new business venture.

And so you probably are dealing with a lot of people with your sort of attitude.

We listened dealers and, and entrepreneurs.

Are you seeing a lot of that?

Are you seeing a lot of people using this money to get the next business going?

Or what are the sorts of stories you're, you're hearing.

It's quite a priority in that respect, in terms of what the money is useful.

We do see average shows coming, looking for a little bit of

sometimes it's spending money.

Sometimes the tall blonde, apple, it needs servicing.

So you get, will be average top of things you might have

spent or associated coursework.

Well, I think the CV show and moccasin has done has my, they political

entrepreneur, the business, they go away.

There are alternatives to the bank.

You don't have to go to the bank for a loan.

I mean, a lot of these people might not qualify for a loan to be quite honest,

to be in some kind of system, but even the ones that do by the time you have

to wait for the sip of the banks, quite often the deals pass or it's over, or

the emergency or the need for that.

. What we can do and what we've been offering, why we start so high and is that

we can offer large sums of money almost instantly secured against your assets

without any risk to your credit rating.

You can bring in your Ferrari or your level of gain or your

piece of art or your gold bullion or your wine collection to us.

We can school you a hundred thousand and two on the federal 500,000 pounds.

If you've got the right documentation.

You can have problems with me in 24 hours.

There's no minimum term for these loans.

There are no way there's no redemption fees to borrow a hundred

grand or so on the back of a bank.

Your arrangement is probably going to be somewhere between five

and 10,000 pounds straight away.

You're probably not going to be able to have that facility

just for awhile two months.

You know, I'm not saying it's wrong or it's white.

I'm just saying there's other fees consider when you're

going to borrow money from.

For sure.

Some funding flowing from me is far cheaper than borrowing money off the bat.

If you want to borrow a hundred grand from me, I'd probably do it.

I mean, it varies depending on what we're presenting, but

I'll probably do it at 2.9%.

If you borrow a hundred thousand pounds of me, 2.9% and you have it

for a month or two, I don't know of any other cheaper forwarding that.

Then it allows you to take that risk.

You could say, I believe in my idea so much that I'm going to put this

up and I believe it's going to work.

I'm going to get my asset back and I'm going to be better off for it.

And if it fails, well, that was the risk I took, but nobody else

is going to let you take that.

Yeah, as you said, there's some very mundane reasons as well.

But when I saw it in that context of entrepreneurship, it did help

change that mindset of mine.

In some ways I see echoes of this big move towards buy now pay later.

So credit card, your whole balance would get paid on minimum.

Now I can say, I just want this pair of sneakers pay down just tiny little

transactions, but you can choose.

I want exactly this transaction to be paid down.

And in some ways you're doing that with assets.

In a world without pawnbrokers and without a bank willing to take a

gamble on you, mortgage your house.

You might not want to risk your whole house, but nobody was going

to see these individual assets.

And I imagined because it's very difficult while you've used your network, you

said going in and your skills to solve that problem and say, well, if I can

understand the value of all these many of, any types of assets from watches

to handbags, to wine, to art, to, to helicopters and airplanes and tanks, if I

can find a way to understand their value.

Then I can lend against that individual asset.

It doesn't need to be a house, but on that, how do you go about that?

Valuing such a wide arrange of assets and in, in asset classes

that aren't always traded that.

What all they say, when I not telling them badly, it does make the

valuation process more difficult.

For sure.

I mean, Bob, these assets, didn't just come out of thin air.

They'd go on history.

If he's a piece of luck, it's probably more difficult to ascertain the bad news.

Then one of the blight monks, but it's not as difficult as people might.

You can go online.

You can track the record itself, there's graphs and peaks available to see what

their works have done over the years.

But when it comes to a forensic location, that's a different matter.

Then that's probably the most difficult part of what we did

or the actual valuation process.

If you're of a mindset and your CMO have that mindset, then you can

pretty much, that would be anything that any mind that we have, we've

been established since that 2009.

The best minds and the best people that our company out there.

from some of the fans, friends from brown list to call today to Chanel.

That's quite useful to me that we've grown in that way.

And now we've got 10 stores across the country and 40 experts that are

well versed in handling these goods.

So the evaluation part of it might be not quite as difficult or us as you

might think because of the expertise that we've actually got a ball at the

beginning, I'll call, you know, I, you know, we were winging it a little bit and

my bumpy Twitch on it, but I liked it if it was that same for, I would probably

wouldn't be that interested in it.

I actually liked the idea.

Having something presented to us that we've never seen before.

We've had some of these assets that we'd never even huddled, never even existed.

We've seen it before.

What are we going to do with this?

But you know, when you've got good people around you and that's

been the last sentence of this.

He had a prototype airplane.

I've seen you with a tank, uh, the helicopter, you know,

a sword engraved by assault.

And it's certainly what makes it interesting to watch from the

outside that people have these family heirlooms, they have these unique items.

It's even more important for them to have an option other than.

That's really where the broke in businesses are the only solution, I guess,

for, for many of these unique scenarios.

But while each one is unique on its own, you know, across the country with 54, 60

million people, there's quite a lot of unique stories around there, which I guess

you've, uh, created as your, your niche.

Yes.

There will be, well, then all sentiments that we attach to Y.

We do come across those people.

We've heard all this should get us some wonderful assets company,

put some incredible stories.

A lot of the times.

I mean, they're the high end items that we see are not, they're not always

sentimentally attached to the problems.

If it's a call.

For example, if you go, if at the end of the line, We're going to have to sell

your Ferrari or your Lamborghini, then yes, you can go out and buy another one.

I like today, if your business takes off or your circumstances

change, then you can replace that.

But there are clients out there that are sentiments.

It's action.

They're not, you know, it's not commonplace, but they do exist.

And for us as a basis, I mean, we don't want to sell people's goods.

So I never wanted to set this business.

That would be a shopkeeper, but that's not why I went into the.

The worst tastes in our, for me is to be selling someone's goods.

We don't want to do that.

It's not good business for us.

It's all.

I mean, I think that there's a misconception or used to be the people

used to think, oh, well, the broker, you know, he's going to get his hands

online goods and he's going to sell it.

And that's not the case itself because it, once you set it

up, you've lost that client.

Now we spent thousands of thousands of pounds, hundreds of thousands on marketing

to get these guys to come in with it.

If I bring that good things in it, and I haven't required that on and

I have to go to market with it.

but it's no benefit for me to sell that goods is actually a negative

for me as a business because we're adding on the interest.

That's what it's all about.

It's all about the interest.

When we go to market, we will return any student pass whatsoever to us.

So if someone blows a hundred grand at the end of the loudly, allowed them 30 grand.

And the goods might have 150 or 200, right?

The pod always gets the balance back.

That's quite important because we don't ever own property.

We're custodians of the goods and we facilitate the sale and we've

got a duty of care to make sure the item itself, the best price.

I mean, nothing.

We don't go to market with that many goods percentage wise.

It's relatively small.

I'm glad you brought that up because one of the questions I had was how you turn

under the value of the asset into a loan.

But with having that balance back to you, it removes a lot of that risk.

You don't have to think.

Well, either way, my diamond rings on the line, I better take

the full a hundred thousand.

You can be comfortable taking the 20,000 you need, because if it

falls apart, you getting that.

Yeah.

I mean, generally we lend up to 70% of a market value, went into the ground.

This is what, there's a little bit of a tough pill for some people to swallow.

When they think of the value, they think of the value of

when they go to in bond street.

You know, I bought this for my wife across a hundred grand only.

What's a bar 90 about.

The value is the second hand value, what the market determines that stability.

So if you're a hundred thousand pound, diamond ring would sell it, one of the

big four houses at 50 grand, we would only really be able to lend you up to

30, 35,000 maximum against that side.

Some of these assets you can't sell immediately.

We've had pieces of all where we've concepted some of the big auction houses.

And they said, well, look, unfortunately, that piece of art needs to go to Hong

Kong and the Hong Kong sale is it till next year is that you've got to factor

all that in when you're presenting your loan, because every month with those

calls, you're incurring another costs.

And you're also loading the price with that as well, because the cost of

borrowing doesn't stop until the items.

In terms of the number.

Anyway, the client receives, you've got to factor all that in the

desirability to that, but let's see, depreciation is another big point.

Gold fluctuates.

It goes up depending on what's going on globally, it might come back.

We've got some bigger little the sense.

Maybe not quite as simple as you're listening to, how to lend money to

strangers with Brendan LaGrange.

If you're enjoying it now is a great time to hit that little

plus button to subscribe.

Yeah.

And I think the, the only downside or there, the question that I have in my

mind, when I look at that model where the asset is so inherent in the loan, but when

we think of customer loyalty and customers coming back to you over and over.

How do you try incorporate sort of rewards for customer loyalty within this model?

That, that still has the, the main question being the asset.

Are there ways for you to adjust the percentage of a loan or

either terms for customers?

You know?

Well, yeah, I mean, the client is really paid so that in respects of the

right and the doing, and we can cut for a client, uh, we might be able to.

And a little bit more favorable rates them.

If they've got a history of repaying their lungs and not to say, well, my

board against this piece of art last year, I probably went back in my mind.

I had it for two months and then I go in again and I'll probably I'll

be thinking, well, actually, if they want a little bit more this time, I

can probably lend them because they're very likely to come and pipe back.

I obviously attach to the sides.

They want it back.

If you don't pay your bank.

And you've ended up in, you know, where the CCJ you're very unlikely to be

able to walk back into that Bible bowl.

Mana, it's not quite on that with us, but if someone didn't reply

them on back to me and I, we solved bakers, I wouldn't refuse them.

I'm not alone, not often adults.

So the next sell my soul and we just tweak that line is a totally different thing.

And it's holding.

About the asset, like we said in the beginning, Bob, well, let's

talk about stolen goods, cause you mentioned . I can think of one item.

I think over the years I've been training with the police time in the morning

to talk to me about the visit about criteria in terms of the ID checks that

we do the past or the driving license, we take images of people to put on their

profiles, fencing, some stolen goods.

You're not going to come and save it to.

You know, that'd be putting themselves at risk in terms of using me as a

method of disposing of stolen goods.

Going back to the offenses, still legitimate goods,

there's been a learning curve.

That's a sure.

I mean, there's some amazing items out there right now.

Some of these super fights, as I said to you before, we've got a wealth of

experience on board now, but you've really got to still be careful.

We had someone coming probably about six months ago with a handbag.

They've got a Chanel hat.

And the fights I was safe from Harrods, but that was amazing.

It was absolutely incredible.

But none of that, all I said was safe.

Doesn't quite feel right to me.

And we started looking at it in more depth and sure.

It turned out to not be it.

So you get a feel for the client.

There was a, God came in, tagging him with a piece of art.

It was very bad, super cautious.

And he had a bank and parts across the road.

And I thought, this just doesn't feel right.

And I said, well, no, he's never seen his car.

It looks across.

I said, yeah, I said, but when was the last time you were able to park outside

the inspire there, you have to wait all day to find the spot, but he must've

been sitting around the corner looking.

Y you for a spice to appear in order for us to be able to see

his towel from the shop window.

It's all these little tell, tell signs, what field do we have for this drive?

What field do we have about the story about this asset, where it came from?

The information that given you all?

I didn't see free.

Does it sound crucible?

There's all that.

And then the last thing obviously is the physical line.

So let's get this, let's get it onto the Montessori.

Let's call in our experts, et cetera.

In some cases, external experts that might be out a bit as a second opinion.

So there's lots of processes in place with the first core of

goal is the client themselves.

And is there still reportable?

Yeah, that's great to hear.

There's still that role for the human intuition.

You know, they're the experts.

I there's a lot to learn, I think, or a lot of insights in there for

traditional lenders as well as they look to go fully online, everything via.

You do have branches where you talk to people face to face, you are

looking to solve their problems and people respond to that.

And you know, it's obviously not a model that works for everywhere and there's mass

market models that will be cheaper for the banks to roll out, but there's still this

value in understanding people's lives.

Yeah, you're not going out there to say what's the cheapest way for me to

give everybody a thousand pound loan is actually how, you know, how can I

get all the pitfalls out the way to allow people to leverage these assets?

They already have short-term so, yeah.

Thank you very much.

As we've mentioned a few times, you've got.

The TV show.

Uh, it was a channel four and a posh porn out there where people can, can watch.

I think my own opinion is worth watching just for the sake of

entertainment, but certainly it gives a nice insight into what asset

backed lending can do for consumers.

For anybody else who's interested in or potentially working with you potentially

using you to access some credit or just to learn more about prestige pawnbrokers

where is the best way they can do that?

Where can they go to look for some more information?

Well, you can go and prestige

um, physically, we've got 10 stuff where if you look at the website,

Uh, Christie's bone burgers and you'll find us underground locations.

Uh, there's lots of guys out there pretending to be us that

we can pick up on one of them.

There's lots of people are using the Google ad terms and, uh, found

a way to do like what we did.

But if you got a

you know, we've got an app as well, Costco.

And I get on all minutes on the phone, I take a picture of a watch or could

be an ad or a chair or a piece of art.

And they got the instant interaction with us, which is great.

So every day we see dozens and dozens of inquiries and images coming through.

Um, so there's yeah, we're not, we're not difficult to find for sure.

Yeah, we've got the lending side of it, which she said, this, what your

folks, you know, obviously we've got the retail side of the business.

Although we all notice pull brokers.

We obviously are, uh, one of the lead guys, biggest buyers of setback,

luxury goods, which is Chromat skulls.

And online.

We saw massive growth in that during the pandemic, basically

online sales, just gone through the roof to be quite honest with you.

It's been astonishing with so mole with doing the pendant mounts

than any other time in that.

So that's quite interesting because I know the pandemic has been quite

devastating for some people, for a lot of people that were not self-employed

the Dean at their own businesses.

They were actually worked financially best for off.

There's no doubt about it.

We saw large chunks of the loan book being paid back.

We've seen it growing now the other way, uh, because it let

us governments or a lot of the government and schemes of counseling.

Yeah, I'm glad you mentioned that because you know, we talked about

verification and the risks involved there.

You've built this team up that has this rare mix of skills across

so many different asset classes.

You've clearly also then been able to turn that into a general way to create trust.

So there's trends as well about being more sustainable, doing

more or reusing of, of goods.

So it fits that trend nicely, but also just, yeah, I'm sure people at

home during the pandemic, cleaning out their houses, you know, nothing

else to do in those first few months, finding things they forgot they

had realizing they don't need it.

It's a way to turn that into some cash when I'm not sure most people

would know hard to, you know, if I wanted to sell them one of my watch.

Where would I do it?

I don't know.

And you've created, um, you know, another way to where people can leverage that,

um, expertise your team's built up.

It's so simple to use.

And I think people, when you're right, when they've been sitting

there maybe a hundred in the pan, then Nevada draws a gold chain.

that looks on the app store.

Well, there's possible.

Yeah.

And it takes that stress out.

It's a bit like when you get your car serviced and the mechanic will pull out

some thing you've never seen before and tell you, yeah, there's cost five grand to

get a new one in the shop under pressure.

Whereas if you can do it at home, you don't have the embarrassment

of going in and somebody saying, well, that's worth five pounds.

It's, you know, it's mass market.

You can see what it is.

You can see if you're comfortable with the price and you can

Google around and see, okay, this seems, it seems like a good deal.

James.

Thank you so much.

It's been really interesting

and thank you all for listening.

This has been hard to lend money to strangers with Brendan LaGrange.

If you're enjoying the content, please do subscribe.

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The show is written recorded and edited by myself.

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