Munibox, an online short-term lender, has introduced an alternative way for broker clients to leverage their non-real estate assets as security for a loan.
Differing from traditional lending models, Munibox accepts freehold transportable assets such as cars, trucks, caravans, trailers and even aircraft as security for their loans.
Martin Leedham, Sales and Operations Manager at Munibox, says “One of the key points of difference with our short-term product is that we do not need to carry out any lengthy credit, employment or financial history checks to approve a client for a loan.
“Through accepting a security asset, we essentially remove the requirement for this documentation, allowing us to approve loans and deposit funds to the client within a 24 hour period.
Broker clients can borrow up to 70% of the value of their asset as valued by Munibox, including interest.
Once the valuation is accepted by the client, the asset is then delivered to one of Munibox’s secure and fully insured storage facilities where it will remain for the term of the loan. When the client is in a position to repay the loan plus interest, or upon maturity of the three-month period, they can then collect their asset.
In the instance the client does not wish to reclaim their asset, which is common in circumstances where they intend to sell regardless, the asset is then forfeited to Munibox for sale at auction with any surplus funds remitted to the client.
It sounds simple in its application, but who exactly uses these types of loans?
The typical Munibox client is a business or individual who is ‘asset rich’ but is experiencing a cash flow issue or has an urgent short-term cash requirement.
Picture a self-employed tradesman, who owns several high value assets used for trade like a bobcat or truck. They have been issued with a surprisingly high tax bill and do not currently have the money in the bank to pay on time.
Using the bobcat as security, which is only used on site occasionally, they can get a short-term loan to pay the tax bill and repay the loan to Munibox once their cash flow has improved.
“We understand that with our clients, it’s not always a viable option to approach traditional lenders as that process can take time and requires a substantial amount of paperwork. Our process is based primarily online to provide the client with an efficient way to access funds in a hurry and resolve their immediate finance requirements, Mr Leedham said.
While Munibox is the first online asset lending platform of its kind in Australia, the concept is certainly booming abroad, particularly in the US and UK.
“We are seeing a trend internationally in the number of people using their assets as leverage for a loan, such as classic and prestige cars which tend to spend most of the time in storage or idle anyway. Munibox provides the same unique method of delivering loans with focus on providing the client with an easy, online application process.”
Munibox operates nationally with their storage facilities located in major cities across Australia.
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