Posted on 13th Apr 2012 @ 10:52 AM

A number of years after banks in the diamond centers have abandoned financing against diamond inventories, a New York City based financial group is offering diamond traders to renew the practice.

OWL Financial Group said this week that it is offering short-term collateral backed funding, based solely on the value of pledged collateral.

Specializing in large loans to the diamond industry, both small and large cash loans – ranging from $10,000 to $15 million , according to its website - can be made available in as little as one day.

Following the 2008 financial crash, banks found that the value of the diamonds against which they provided credit were worth much less, raising the banks' exposure to bad debt.

In some cases, banks found in retrospect that the initial, pre-crash value of diamonds put up as collateral was in fact lower than first estimated. Following this, banks, mainly in Israel, seized the practice of offering financing against diamond inventories.