The 7 Most Important Facts About Art Finance | Oak Park


The use of art in loan applications to act as collateral has seen an incredible increase in recent years. Collectors are taking care of their artworks and are aware of the financial implications of the work and are considering the possibility of financing art to access capital stored in the most valuable asset that they love. In order for you in understanding the most recent developments in the field of art assets, we’ve listed seven things we think you need to be aware of in relation to Art Finance.

With the growing number of buyers and buyers, the Art Finance market is growing particularly for those whose needs aren’t being fulfilled through traditional banking institutions.

The report from the Art Basel/UBS Market revealed that, despite the fact that there are few collectors that are in the upper-end market, however, overall market activity is increasing in a significant way to $63.7B. The market is predicted to grow once banks become more accustomed to using art financing. There are two kinds of people who use art loans: private collectors seeking to invest their funds in a different way and professionals working in the art world including dealers and galleries whose financials aren’t up to the rigorous lending criteria.

Art Finance is growing year over year

The value and worth associated with artwork are rising and art is becoming more important in the total value of the collection. Before purchasing artwork or a piece of art the contemporary collector is more concerned with the value of the work and how a reliable selling platform will enable the price to come to fruition. Selling artworks isn’t easy but it’s also not impossible when you take into account the cost of the transaction, as well as other costs.

The Art Finance industry is being motivated by the significance of art as well as the absence of liquidity. The possibility of getting a loan for art to fund investment is becoming an increasingly popular method of selling. Collectors can take the cash value from their art collection, and put the money into more profitable traditional or alternative investment opportunities.

The borrower could take out a loan at various periods during the economic cycle

As with all markets it is as cyclical. When the economy is in decline, most people are seeking liquidity, but without losing their own art. In times of expansion, these borrowers are sure of their financial stability for the near term. They are ready to make investments in new artworks or even take out loans against the costs of selling in order to avoid the capital gains tax which is a substantial amount.

Whatever the market blue-chip art that has an established history of the artists who are in the top 200 such as Warhol as well as Picasso has always maintained their worth.

TheU.S. is the world’s leader in the field of art lending

The U.S. is a leader in the area of art loans due to two primary reasons. The second is that the legal and regulatory framework is one of the most accommodating for secured loans. Furthermore, the magnitude of the market and its activities encourage growth. Globally, there is increasing demand, and it is predicted to expand across several geographical areas, with special attention paid to China.

The work of artists with the longevity of success is usually the most important

Although new artist who has become “hot might be able to receive high-end prices for their works on the current art market, prices may increase in the near term. The collateral utilized to secure loans should at the very least maintain its value. The previous performances of collateral during different economic periods are the most reliable indicator of stability in the coming period. It is suggested for collateral that is used to secure loans be supported by a steady buyer base, with the ability to make offers at any time during the course of the cycle.

Data play a growing and significant part in Art Finance, especially in the assessment of the risks associated with loans

Data is crucial. Market information and its intelligence are essential to estimating and credit underwriting. YieldStreet or Athena Art Finance makes use of public data to produce unique analysis which is tailored to the needs of artists. Determine whether an artist’s liquidity is in with the marketplace.

The main obstacle facing those who are in the market for a loan is understanding that this type of loan is easily accessible

It is essential for dealers and art collectors to be aware of what items they can get and how they can use collateral as collateral can help them in achieving the financial targets they have set for themselves. The main problem is the lack of information.


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