While many industries struggled to recover from the recent recession, a few were growing naturally, in large part due to the worldwide belt-tightening. One example? High-end pawn brokers.
With banks still hesitant to give loans, people with jewelry, art and even vintage wine, have gone to these brokers for a quick trade of assets for cash. Borro, one of the primary firms in the business, offers personal-asset loans for up to $2 million -- many on the same day or within days. Launched in London in 2008, Borro arrived in the U.S. last year. Recently, we spoke to founder and CEO Pail Aitken about Borro's model -- and why the company dislikes the term "pawn broker."
CBS MoneyWatch: Borro has been defined as a high-end pawn broker. Why don't you like this term?
Paul Aitken: Technically that's right. But technically a bank that has loans is also a high-end pawn broker. It doesn't totally encapsulate what we do, and our customers don't see us that way. We're online and have offices in big cities, locations where companies can see us, but it's very discreet.
Our average loan value is $15,000, which is close to 100 times the average sale at a pawn shop. In terms of the assets we accept, they are mostly nice watches and jewelry, but we also do esoteric assets like fine arts, luxury car and collectibles like Oscars and Grammy awards. We don't go below $1,000.
MW: So how does a loan from Borro differ from a bank loan?
PA: We are lending against the assets. There are no credit checks for the individual. Speed is also a big differentiator. We can write loans the same day on watches and jewelry. Cars are the next day.
MW: Before founding Borro, you were an executive with Movata, a mobile solutions corporation. What lessons do you bring from that experience?
PA: Any business needs good people. I've been running my own companies for over 10 years, and I'm less focused on how much experience people have and what they've done in the past. I'm more interested in their behaviors and character, and how I feel they can impact our business. Some people who have had the biggest impact on our business wouldn't have been hired by a big organization.
I like people who think a bit differently and who aren't going to take no for an answer. If there's a wall in front of them, they'll try to find a way around it by being smart. And someone resilient enough to plow through the wall.
MW: What was the best career advice you've ever received, and who gave it to you?
PA: I think a professor at business school said not to overplan or over-research -- just get on with it. You learn from doing. Some things work, and you keep doing those, and you make mistakes and learn from those.
When I started Borro, I didn't have a background in this, and did a months research and decided to get on with it. You also need to bring investors on board during the process of doing. They want to see that you have a basic model, customers and what you've learned so far.
MW: How do you achieve a life work balance -- or do you?
PA: I'm one of those people who does big blasts of work, and then I need time to switch off. Caroline, my other half, and I travel a lot. And I cycle and ski. And sometimes I do nothing but watch sports on television. For a few weeks of the year, I shut off completely.
With my first startup it was 24/7 for two or three years. With Borro it was that way, too. But you can't do that forever.
Photo of Paul Aitken courtesy of Borro.