Online pawnbroker expands with £20m investment

Online pawnbroker Borro is believed to have raised around £20m to fund expansion. Borro's loan book is doubling in value every three months as customers flock to take advantage of loans with interest of up to 85 per cent APR, according to sources.

The loan book grew by nearly 800 per cent in the first half of the year and a rise of 1,000 per cent going into 2010 looks likely. Of the £20m, £15m will be debt financing from Kreos and the European Founders Fund to expand lending to customers. The balance, from Eden Equity, is to grow the business.

Borro offers loans of between £100 and £100,000, though it usually lends small amounts to customers who can secure the loan and can then borrow up to 40 per cent of the pawned item's value.

Pawnbroking is booming and several online brokers, such as Cash My Gold, have been launched.

Borro's chief executive, Paul Aitken, declined to comment.