Suros Capital is first asset lender to offer finance against NFTs
Specialist short-term luxury asset lender, Suros Capital, is adding NFTs (non-fungible tokens) to its roster of assets the company will finance.
With digital artwork reaching values as high as USD69 million, this novel asset has boomed in popularity in recent months.
Suros Capital co-owner, Paul Aitken, says: “Our business is essentially about helping people with valuable assets to quickly raise short-term finance to support growth opportunities. As NFTs become more recognised for their value, it’s important we move with the times and bring this area of expertise into our business so we can both appraise and lend against it.”
Suros Capital typically lends against luxury assets such as fine art, wine, diamonds, and watches, as well as classic and luxury cars. When taking an asset against a loan, the company arranges for storage either in its own vaults or specialist art, wine, or car storage facilities. The fact that NFTs only exist in the digital world presents both an opportunity and a challenge.
Aitken says: “Not having to carefully store and insure delicate assets is a plus point, but the fact that ownership of NFTs is written into blockchain code held on thousands of computers around the world presents other challenges. We have therefore needed to adapt our business to protect the capital we lend against these assets.”
In order to do this, Suros Capital has opened its own digital wallet. Just like transferring ownership of a car, the owner of the NFT will need to transfer their digital ‘key’ related to the artwork into the newly created Suros Capital Ethereum Wallet. There is then an additional level of security:
“The final step will be to store our offline hardware wallet in our vaults for added protection,” says Aitken.
Suros Capital will lend from GBP20,000 to GBP2 million, and in this initial phase, the company caveats that it will only lend against NFTs with an auction track record. There have been a number of sales of NFTs at both Christies and Sotheby’s in recent months, including the USD69 million Beeple work.
Unlike banks or other lending institutions, the company is able to provide finance quickly, often within hours of an enquiry, allowing its customers to take advantage of a timely business opportunity or manage a short-term cash flow problem.