PSA Loan Dept

spazzy

I saw in my new Smr today an ad that says a collector can get a loan from psa if the cards are graded from psa. The amount is 50%of SMR book to get what you can borrow. I can understand that if loan defaults then the value of 50% is safe for PSA. (OF course 4% over prime rate too) They also list that autographs can be used for loans too but only for 35% of book. My question is Does that mean autographs are overpriced in SMR if they only want to value at 35%...Am I missing something here?

storm888

"..Does that mean autographs are overpriced in SMR if they only want to value at 35%..."

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Autos make-up a smaller segment of the market
than high-end cards. It would likely be harder to
dump defaulted autos than defaulted cards.

spazzy

<< <i>"..Does that mean autographs are overpriced in SMR if they only want to value at 35%..."

/////////////////////////////////////////////////

Autos make-up a smaller segment of the market
than high-end cards. It would likely be harder to
dump defaulted autos than defaulted cards. >>



Storm, shouldnt the values be lower in the guide and then give 50% of the value?

storm888

"shouldnt the values be lower in the guide and then give 50% of the value? "

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There are fewer auto sales than there are card sales.
That does not affect the "values," that are reflected
in the guide. It just means that it may be harder to
dump autos quickly; they are worth less as security.

Stingray

Wasn't the loan amount at least $5,000 and it had to be paid off within a year?? I really do not see anyone taking "advantage" of this.

tkd7

My guess is that the loan is underwritten by a bank and those were the terms that PSA and the bank agreed to. If the seller defaults, PSA likely has to sell the items to refund the bank. I would be surprised if PSA went into the business of lending money themselves, but I could be wrong.

Stingray,
I would guess a dealer could use this as a way to make a large purchase and flip it to pay back the money.

earlycalguy

Stingray,
I would guess a dealer could use this as a way to make a large purchase and flip it to pay back the money. >>



I think psa also holds onto the collection until it is paid off. if so you could not flip anything until the loan is paid off and the collection is in your hands.

basestealer

So PSA has become a pawn shop. Nice.

mercurynut

It means PSA has very little faith in its own grading standads! If it did then PSA would offer at leastv 75% of market value.

tkd7

<< <i>Stingray,
I would guess a dealer could use this as a way to make a large purchase and flip it to pay back the money. >>



I think psa also holds onto the collection until it is paid off. if so you could not flip anything until the loan is paid off and the collection is in your hands. >>



I was thinking of it more as financing, I send PSA my cards, I get a loan, I pay off an auction house for inventory, I sell inventory, I use my income to pay off the loan and get my original cards back.



<< <i>It means PSA has very little faith in its own grading standads! If it did then PSA would offer at leastv 75% of market value. >>



I don't think this is a PSA choice, I'm sure it is the financing company behind the program that set the 50% level. Banks aren't in the business of selling cards, they are in the business of loaning money and making interest.

Besides, I'm sure some slick person could figure out what cards' market value is below the current SMR and try to take advantage.

cravetopps

come on guys. baseball cards are not exactly the same as a home. 50% seems reasonable to me. you won't get your own bank to do it so don't knock these guys. it is a new division of collector's universe so same company, different division. they have a depository company hold the cards or other stuff as collateral.

rise2it

Uh, I'd loan money all day, every day, with better interest, for the same deal, maybe even a higher percentage of SMR on vintage.

I have worst investments than this that I would gladly roll over, and I've played 'banker' before...

cohocorp

i disagree. i think that this shows confidence in their company and the market in general. normally you need substantial real property as collateral., i.e. home, car. you can borrow money against stocks (margin) at 50 percent as well. never before did i ever hear that you can draw loans on sportscards. this absolutely shows confidence no matter what equity percent it is. even buying houses, the norm is to put down 20 percent. --and we need homes, we do not need cards. now with the fluctuation of the market of cards, 50 percent is very realistic, nothing in print can keep up with the market regarding smr.