Hong Kong Company Offers handbag backed loans

Hong Kong Company Offers Loans with High-End Purses as Collateral

Call it a niche market or derivative product, but Lady Finance Company of Hong Kong is offering loans worth thousands of dollars to women who are willing to put up their fancy purses as collateral.

The loans are short-term and require authentic handbags exclusively from the following name brands: Prada, Chanel, Gucci, Hermès, or Louis Vuitton. No word yet on whether Lady Finance Co. will add exotic handbags to their list such as those made by the Olsen Twins Mary & Kate which sell for tens of thousands of dollars.

For now, those patrons having any of the select name brand handbags may borrow up to 80% loan to value at a modest interest rate of 4%. The loans must be repaid within four months. The minimum loan amount is roughly 190 USD.

Most people actually reply the loan to retrieve their prized possession, said Byron Yiu, Yes Lady Finance’s chairman and chief executive.

“Milan Station buys handbags. We give cash to our clients to buy their items for good. And then we realized many clients attach a sentimental value to their bags,” he said.

“They don’t want to sell them for good but they need money. So we came up with the idea of running a financial company that lets people use their handbags to borrow money … It turns out to be a very popular service.”

Lady Finance Co. stated that they recently allowed a woman to borrow over $20,000 in exchange for her Hermès Birkin. Unlike those who borrow with their home or auto as collateral, those who borrow against their beloved handbags must surrender the item to the lending company.

One patron, Maggie Wong, says that the service is very convenient and is an easy way to get access to cash when she needs it. She says here’s far less paperwork to fill out.

On The Web:
Hong Kong company offers handbag-backed loans
http://www.news.com.au/money/cost-of-living/hong-kong-company-offers-handbagbacked-loans/story-fnagkbpv-1226696689420