Art-backed loans, designed for individuals, companies and incorporated partnerships, offered at fixed interest rates for dealers, galleries, collectors and art owners.
Acquisition loans are used by collectors and art-world professionals to assist in purchasing items either privately or at auction. A facility is established specifically to help acquire one or more target artworks. If the purchase is successful, the acquired works become the primary collateral for the art loan facility.
Bridge loans are designed to provide liquidity in advance of a planned auction or private treaty sale. They can be structured as short-term, 3-6 months, or longer if required. They are generally more expensive than longer term loans and are charged on a per month basis. Bridge loans are paid off the day the piece is sold.
WORKING CAPITAL LOANS
Working capital loans can be used at the discretion of the borrower, a collector or a gallery, for any purpose. A working capital loan in order to unlock liquidity for their art collection which they can then use for a business deal. Managing cash flow can be a significant challenge for galleries that rely on a few major sales to generate income and have to meet regular commitments or one-off expenses such as attending art fairs. Working capital loans can be secured against existing gallery stock.
REVOLVING CREDIT LOANS
When establishing a Revolving Line of Credit the client puts up enough art collateral to establish a “drawdown facility” that can be used at their discretion and for any purpose. A set of rules are established at the start that dictate the ways and amounts that can be withdrawn at any one time. These rules often include minimum value of the collateral portfolio, minimum value per object, low risk portfolio, maximum amount to be drawn out at a single transaction, and set up fee for the credit line.