Paul Aitken, Founder of borro: A New Way of Lending

This contributed post is for informational purposes only. Please consult a business, financial and legal professional before making any decisions. We may earn money or products from the affiliate links in this post.

Reading about the recent success of online pawn shop PawnGo brings back memories of the first year of my business, borro.

The opportunity

I founded borro, the UK’s leading online pawn shop, in 2008 and have never looked back!

Traditionally, UK pawn shops had a similar set of negative connotations associated with them as they do in the US and few people wanted to use them.  If they did, they didn’t like to admit it.  From being a regular sight on every street in 19th century, only 50 were left in the UK by the 1970s.

Then, the recession hit and their popularity soared.

I had become aware of online businesses that had taken ‘gray’ industries and legitimized then (online gambling and second-hand selling spring to mind). This, plus a dream I had following the TV screening of the movie The Pawnbroker with Rob Steiger, resulted in the birth of borro.

borro is more than a pawn shop: our business is not about lending a couple of hundred dollars at a time. We recently reported a 111% rise in loans of $30,000 or more provided to customers in the first six months of 2011.  We are seen as a bridge between the UK’s high end pawn shops and private banks.

Model for success

PawnGo’s business model is similar to borro’s.  We lend $200 to $2 million secured against any article of value.  We have provided loans to customers secured against jewelry, luxury watches, gold, fine art, antiques, sculptures, luxury cars, yachts, speedboats and fine wine collections.  We have had many unusual assets in our care – from Beatles memorabilia to a painting by Banksy, the renowned street artist.  What links all the items that people loan against is that they belong to an ‘asset rich, cash poor’ person – and the assets matter to them, so they want them back.  borro has a really low default rate on our loans – only 11% of our customers do not pay back their loans, against a UK average of 23%.

Like PawnGo, we arrange secure transport of customers’ assets to us and store them in high security sites.  For example, the majority of our customers’ possessions are stored in the Silver Vaults in London’s Chancery Lane.

Securing growth

borro has been in operation for three years and has loaned $20 million to increasingly high-end customers.  In fact, we recently secured our biggest loan of $1.7m — secured against a 19th century fine art collection valued at $8 million.  The owner of the collection, an antiques dealer, will use the funds to complete a large property deal and plans to pay back his loan in around four months once he has concluded another deal.

I have read that PawnGo has been able to secure funding from investment group Lightbank, run by the co-founders of the deal site Groupon.  They have exactly the right strategy here – funding of this level is essential for growth.  Similarly, borro has received equity growth funding from Augmentum Capital (Bullion Vault and Betfair), European Founders Fund (Groupon, Facebook, Linked-In,, Jamba!) and Eden Ventures (Apertio, Truphone,, as well as loan book financing from Octopus Investments and Kreos Capital.  This means that we can fund the increasing demand for loans requests we’re receiving from customers.

Changing perceptions

One of the biggest challenges I have faced, and I am sure PawnGo also faces, is to change people’s perceptions of this type of lending.  borro’s business is not about distress lending – it is about enabling people to take advantage of opportunities available to them. For example, we have seen 85% more small business owners approach us looking for short-term funding to allow them to complete a deal (first half of 2011 compared to 2010).

An example of this is Boudicca Scherezade, a client of borro’s, who borrowed $7,000 against a range of valuables including an 18ct Gold Rolex and a Cartier Love Bangle to help her antiques business.  She needs to be able to purchase antiques on behalf of her clients, but does not get paid until she delivers.  borro has, therefore, been able to help her grow her business by providing money quickly to fund purchases upfront.

It is no wonder that people like Boudicca come to borro for help when you consider that UK banks have refused to lend to more than 300,000 small businesses in the last 12 months, starving them of the cash they need to create jobs and power the recovery from recession. In addition, figures out this week have reported that only 15% of small UK businesses will approach the banks for finance as the rest are concerned about being turned down (SME Finance Monitor, 12/07/11).

Continuing to move borro away from traditional perceptions of pawn shops, my team and I launched a service for intermediaries.  This allows accountants, lawyers, and other finance professionals to refer their clients to borro at preferential rates and secure a commission themselves.  This service has had a fantastic response and many of our higher value loans have been secured in this way.

Looking to the future

PawnGo has secured fantastic results so far with loans of over $1.5 million to date.  If my experiences with the development of the business are anything to go by, PawnGo will have great opportunities to grow.

Most importantly, PawnGo will be able to provide individuals and small business owners across the US with the means to take advantage of opportunities when they arise and at a time when it is extremely difficult to secure funding in traditional ways.  Hopefully, we will also see a much needed perception change in this type of lending before too long, making it an accepted and mainstream source of finance.


Paul Aitken founded borro in August 2008.  Paul had previously founded Movota, a successful provider of mobile solutions to leading media companies, which he sold to Bertelsmann in 2005.  In addition to this, Paul has extensive senior operations, supply chain, marketing, & strategy experience in the Retail and IT sectors from his time working with DSG International and RM plc.

Paul also holds an MBA from IMD, Lausanne, Switzerland.