PWCC expands its lending activities

[Peter_Spaeth]

https://sports.yahoo.com/cards-colla...143000970.html

[Aquarian Sports Cards]

at what point do they run afoul of banking regulations. Pawn shops are regulated. Cash advances are one thing loans with interest are another entirely, no?

[Peter_Spaeth]

Originally Posted by Aquarian Sports Cards

at what point do they run afoul of banking regulations. Pawn shops are regulated. Cash advances are one thing loans with interest are another entirely, no?

Maybe they comply.

[UKCardGuy]

Originally Posted by Aquarian Sports Cards

at what point do they run afoul of banking regulations. Pawn shops are regulated. Cash advances are one thing loans with interest are another entirely, no?

I suspect its Whitehawk Capital Partners that's the regulated financial business. My read of the article is that PWCC has partnered with Whitehawk. Its similar to the way a car dealer might use a financing company to offer car loans. In that scenario the finance company is the one doing the lending. Thebthe dealer benefits because they can sell more cars and they probably get a fee from the financing company for every loan .

G@ry G01db3rg

[Aquarian Sports Cards]

Originally Posted by UKCardGuy

I suspect its Whitehawk Capital Partners that's the regulated financial business. My read of the article is that PWCC has partnered with Whitehawk. Its similar to the way a car dealer might use a financing company to offer car loans. In that scenario the finance company is the one doing the lending. Thebthe dealer benefits because they can sell more cars and they probably get a fee from the financing company for every loan .

G@ry G01db3rg

Possibly I didn't read it closely enough I was thinking whitehawk was an investor in PWCC and was providing capital for them to use.

[Snapolit1]

PWCC and PSA continue to thrive despite the relentless withering condemnation of the Net 54 board. I guess there's a moral in there somewhere.

[Peter_Spaeth]

Originally Posted by Snapolit1

PWCC and PSA continue to thrive despite the relentless withering condemnation of the Net 54 board. I guess there's a moral in there somewhere.

Or a lack of them.

[BobC]

Just another example of how some cards are becoming even more like investments, and not so much just a hobby anymore. Maybe it will go far enough so that one day TPGs are finally forced to comply with some standardized rules and become subject to independent oversight. Aaaahhhhh, one can dream, right?

[Peter_Spaeth]

Originally Posted by BobC

Just another example of how some cards are becoming even more like investments, and not so much just a hobby anymore. Maybe it will go far enough so that one day TPGs are finally forced to comply with some standardized rules and become subject to independent oversight. Aaaahhhhh, one can dream, right?

It won't happen unless someone makes it happen. Who is that someone?

[parkplace33]

I joked a few years ago about auction houses having their own credit line you can use for purchases.

That is no longer a joke.

[BobC]

Originally Posted by Peter_Spaeth

It won't happen unless someone makes it happen. Who is that someone?

LOL

If I knew of some way to do it, I would. But I would need to get the entire hobby/investing community to buy in and all agree. That will never happen though.

[Republicaninmass]

Originally Posted by Peter_Spaeth

It won't happen unless someone makes it happen. Who is that someone?

Who is John Galt?

[raulus]

Obviously everyone who’s anyone is getting into the vault game these days.

And I suppose there’s some subset of the population that will find it useful…

But I just don’t trust anyone to hold onto my cards for me!

If I hold them in the vault for the next 30 years, what’s to keep them from wandering off, getting filched, or mysteriously disappearing? Can I swing by the vault every few weeks to check in on them? If others are swinging by the vault, are they fingering my items as they pass by?

And for that matter, what happens if these vault companies go under? Based on all of the crypto “banks” that have gone under and taken people’s crypto with them, it seems like the same problem could easily exist here.

Even if there are published policies and safeguards and insurance and whatnot, why risk it if it’s never really been tested to really know for sure?

And that’s overlooking the most obvious drawback - staring at pictures on a screen and knowing that my collection is (hopefully) sitting in a vault somewhere is not the same thing as actually enjoying them!!!

[Rhotchkiss]

I do not use a vault. But I do think the vault concept is a great idea. Not only does it legally avoid state tax (if the vault is in a tax exempt state and the card is held there long enough), but it’s an apparently very safe place to store valuable assets. Would people question someone who had their cards sent to a Bank of America safety deposit box located in Delaware (or Oregon)? This is very similar to that, except it’s PWCC/Goldin/EBay, etc instead of Bank of America.

If you trust the vault owner (and that’s a legit “if”), and you don’t care about seeing and touching your cards on a regular basis… than why not? This especially true if you are buying expensive cards and savings tens of thousands on taxes. And you don’t have to worry about theft, fire, flood, etc., can use these cards as collateral for loans, have a third party inventory and track your cards, and you can resell them right there without having to deal with mail.

Meanwhile, you are going to see generic vaults pop up all over. Banks are closing brick and mortar locations, and with them, the safety deposits contained therein. There will be a shift to private vaults (or safety deposit spaces). It’s no different than self storage for expensive/important stuff. The vault is for cards specifically, but it’s coming on a more general, mainstream level

Regarding state taxes- it is not avoidance if the card is sent and remains in the tax exempt state for a meaningful duration. I am not sure what that is, but 2 years is most definitely sufficient. It’s also sufficient if it’s sent there and leaves within months bc it’s sold to another. There are real and substantial business reasons for sending your cards to a vault, especially if they are assets, that have nothing to do with tax avoidance - safe protection, storage, serve as collateral for a loan, third party inventory/tracking/reporting (they make your collection “spreadsheets”), ease of resale, etc.

[Johnny630]

This is Desperate. I''LL CONTINUE TO AVOID PWCC AT ALL COST.

[Peter_Spaeth]

I do think many people use the vault option to avoid taxes and take their cards out of the vault very quickly, and then fail to pay their state the taxes that automatically would have been collected by ebay.

[japhi]

Originally Posted by Rhotchkiss

I do not use a vault. But I do think the vault concept is a great idea. Not only does it legally avoid state tax (if the vault is in a tax exempt state and the card is held there long enough), but it’s an apparently very safe place to store valuable assets. Would people question someone who had their cards sent to a Bank of America safety deposit box located in Delaware (or Oregon)? This is very similar to that, except it’s PWCC/Goldin/EBay, etc instead of Bank of America.

If you trust the vault owner (and that’s a legit “if”), and you don’t care about seeing and touching your cards on a regular basis… than why not? This especially true if you are buying expensive cards and savings tens of thousands on taxes. And you don’t have to worry about theft, fire, flood, etc., can use these cards as collateral for loans, have a third party inventory and track your cards, and you can resell them right there without having to deal with mail.

Meanwhile, you are going to see genetic vaults pop up all over. Banks are closing brick and mortar locations, and with them, the safety deposits contained therein. There will be a shift to private vaults (or safety deposit spaces). It’s no different than self storage for expensive/important stuff. The vault is for cards specifically, but it’s coming on a more general, mainstream level

Regarding state taxes- it is not avoidance if the card is sent and remains in the tax exempt state for a meaningful duration. I am not sure what that is, but 2 years is most definitely sufficient. It’s also sufficient if it’s sent there and leaves within months bc it’s sold to another. There are real and substantial business reasons for sending your cards to a vault, especially if they are assets, that have nothing to do with tax avoidance - safe protection, storage, serve as collateral for a loan, third party inventory/tracking/reporting (they make your collection “spreadsheets”), ease of resale, etc.

The comp with BAM is a bit ridiculous. Banks are VERY highly regulated, and failure rates are absurdly low.

PWCC may own a vault that has similar features to a bank vault but that's where the similarity ends. The risk in keeping cards in one of these vaults isn't that someone will break in, or there will be a fire. That is marketing and appears it is working. Loss due to theft or fire is covered by insurance.

The real risk is that the business fails, a bankruptcy follows, and your cards are being held / secured by another party. Which has happened in other vault type business, wine for instance. Add in that folks are borrowing against those cards and in the case of a business failure, someone else will have dibs on your stuff.

I know business failure is hard to fathom after the crazy 10 year bull run but large companies fail on the regular, none of us have any idea what PWCC's financials look like.

[glchen]

Originally Posted by raulus

And for that matter, what happens if these vault companies go under? Based on all of the crypto “banks” that have gone under and taken people’s crypto with them, it seems like the same problem could easily exist here.

This is what I am concerned about with PWCC's lending activities and using the Vault as leverage. Has anyone who uses Vaults checked on what happens if PWCC goes bankrupt? Can they take your cards and use it to pay off their creditors? This is what happened to some of the crypto firms like Celsius that went bankrupt. Folks who kept their crypto in those firms were not able to access their holdings anymore. If leverage like this is propping up card values, this may be what may ultimately cause the market to pop later.

[Fuddjcal]

Originally Posted by glchen

This is what I am concerned about with PWCC's lending activities and using the Vault as leverage. Has anyone who uses Vaults checked on what happens if PWCC goes bankrupt? Can they take your cards and use it to pay off their creditors? This is what happened to some of the crypto firms like Celsius that went bankrupt. Folks who kept their crypto in those firms were not able to access their holdings anymore. If leverage like this is propping up card values, this may be what may ultimately cause the market to pop later.

Ohhhh. The Market could POP too? What could possibly go wrong where Brent Mastro, known 5-pronged fraudster is concerned LOL

[BobC]

Originally Posted by glchen

This is what I am concerned about with PWCC's lending activities and using the Vault as leverage. Has anyone who uses Vaults checked on what happens if PWCC goes bankrupt? Can they take your cards and use it to pay off their creditors? This is what happened to some of the crypto firms like Celsius that went bankrupt. Folks who kept their crypto in those firms were not able to access their holdings anymore. If leverage like this is propping up card values, this may be what may ultimately cause the market to pop later.

And this is a big reason why I'm guessing the vault services are provided by entirely separate companies than the related AH/sales companies. At least it now lets people know to ask these vault providers how their businesses are set up, and if they are independent and totally separate from other possibly commonly owned businesses. And by separate, I mean where there is not just one single business that owns and runs the AH/sales operation and the vault, or where one is a total or partially owned subsidiary business of the other. And you can have both businesses owned entirely by the same people, yet they ae still considered separate as long as the businesses themselves don't own any part of each other.

My guess is the operation lending people money on their collectibles may be set up as an entirely different/separate business and entity from the vault and AH/sales businesses as well. Would make some sense.

[raulus]

Just got an email from PWCC with these details. Maybe not as rich as some had hoped:

Key items in the capital program are our loans and advances.
• Vault Loans – PWCC offers loans on a portfolio's conservative market value, using their trading card assets as collateral. We loan up to 40% of asset value at an interest rate of 1% per month in a 60-day term with optional renewal. A 1% origination fee may apply on these.
• Cash Advances – You can request a cash advance for up to 50% of the conservative market value of items you’re sending to auction. (more possible upon approval)

[Johnny630]

I'd rather go to crackpot pay-day loan check cashing joint then PWCC.

[BobbyStrawberry]

Originally Posted by Johnny630

I'd rather go to crackpot pay-day loan check cashing joint then PWCC.

Is there really that much of a difference at this point?

[Johnny630]

Originally Posted by BobbyStrawberry

Is there really that much of a difference at this point?

Sadly very little.

[Lorewalker]

Two interesting FAQs on the PWCC Vault page.

What happens to my items if PWCC files for bankruptcy?
First, we would like you to rest assured that PWCC is in excellent financial standing. With that said, assets would be returned to their owners in the event of PWCC filing chapter 7. Unless a client's account is in default, or PWCC Capital has a lien against the assets for a loan, PWCC has no claim to ownership of the assets stored in the Vault.

And someone brought up valuations:

How do you determine market value for my item(s)?
We use our algorithm and recent sales data to determine items’ market value.

Wondering what their algorithm is.

I have not used the PWCC's vault but it seems that terms have possibly changed. I have not heard of anyone paying sales tax on their withdrawals once the cards have been seasoned and held by the vault for a certain amount of time. I have heard of administrative fees being paid to PWCC on a withdrawal.

[Casey2296]

Originally Posted by raulus

Just got an email from PWCC with these details. Maybe not as rich as some had hoped:

Key items in the capital program are our loans and advances.
• Vault Loans – PWCC offers loans on a portfolio's conservative market value, using their trading card assets as collateral. We loan up to 40% of asset value at an interest rate of 1% per month in a 60-day term with optional renewal. A 1% origination fee may apply on these.
• Cash Advances – You can request a cash advance for up to 50% of the conservative market value of items you’re sending to auction. (more possible upon approval)

So an effective interest rate of 12.683% at 40% loan to value, but the real trick is the 1% origination. Lets say you take a 25,000 loan and pay one point ($250) but have to pay the loan back in 60 days, that's another 6% interest over those two months. So you can effectively be paying 18.683% in the first 60 days.

Where do I sign up. As a Lender.
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