To meet dealers' cash needs in an increasingly active coin market, a new firm has been created to loan money to dealers.
Collateral Finance Corporation, a subsidiary of A-Mark Precious Metals, Inc., Santa Monica, Calif., will provide fast, short-term loans to dealers.
"Loans from $50,000 to $5 million or more can be made on coins that are in the dealer's inventory or in the process of being certified by Numismatic Guaranty Corporation or Professional Coin Grading Service," said Thor Gjerdrum, chief financial officer of CFC, a licensed California lender.
Gjerdrum explained the motivation behind the new business.
"We found our customers asking for this type of finance product and established CFC to meet the lending needs of coin dealers and collectors," said Gjerdrum. "This gives dealers an immediate opportunity during the hot rare coin market to leverage their inventory to obtain cash for additional purchases of coins or bullion. It lets dealers do more business because they'll have extra money available when they need it. And, their coins held as collateral can be returned within 24 hours," he explained.
Dealers can also offer their retail customers third-party financing for their purchases through CFC.
According to A-Mark, loans can be made on gold, silver, platinum and palladium bullion; U.S. and world bullion coins; U.S. gold coins minted prior to 1933; modern issue U.S. Mint products; rare coins; and generic Morgan and Peace dollars.
A special financing rate is available in April as part of the celebration of the launch. Saint-Gaudens double eagles graded MS-63 or -64 by Numismatic Guaranty Corp. or Professional Coin Grading Service can be financed for three months at a fixed rate of six percent on minimum loans of $50,000 or more. The loans also can be made on uncertified Saints while they are submitted to NGC or PCGS, according to Gjerdrum.
"CFC gives dealers an immediate opportunity in a bull market to get cash to buy fresh deals by using their existing inventory as collateral, whether that inventory is already at a grading service or locked in the bank or stacked on the floor," said Gjerdrum.
"It lets them make fast decisions and deals in the hottest numismatic market in decades."
A-Mark is an Escala Group company.
For additional information, contact Collateral Finance Corporation by writing to 429 Santa Monica Blvd., Suite 230, Santa Monica, CA 90401, or by calling (310) 587-1410.