Art Radar Asia

Contemporary art trends and news from Asia and beyond

  • Photobucket
  • About Art Radar Asia

    Art Radar Asia News conducts original research and scans global news sources to bring you selected topical stories about the taste-changing, news-making and the up and coming in Asian contemporary art.

Posts Tagged ‘art loans’

Art loans can offer liquidity to your collection

Posted by artradar on November 4, 2009


ART LENDING INDUSTRY: ARTTACTIC PODCAST REVIEW

On October 13th, ArtTactic published there latest edition of the ongoing podcast series dedicated to art market topics. The new podcast titled “Art Lending Industry is an interview with Andrew Rose, the president of Art Finance Partners based in New York City. Highlights from the interview include detailed information about the array of available loans through Art Finance Partners, Rose’s opinions about how the recession has affected art lending, and a status update on the current state of the art market.

logo

Art Finance Partners is a specialty finance company that provides innovative credit and advisory solutions to owners of "unconventional" assets, such as fine and decorative art, antiques and collectibles.

Types of Loans

“Bridge Loan to Sale”– Advance in funds against and art asset that will be sold. Used to get cash before sale transaction happens. The duration is typically 12-18 months with renewal provision.

“Acquisition Financing”- Upfront loan given to buy artwork, paid back overtime. Similar to real estate loan/mortgage.

“Working capital line”– Used by dealer or collector to finance inventory or collecting needs. The duration is 12 months with the option to renew.

The advantages to employing art loans to your personal art investment strategy are two fold. They offer liquidity between auction cycles (bridge loan to sale), and allow you to defer payment which frees up capital increasing yearly collection budgets (acquisition financing).

How the recession has affected art lending

When asked how the recession has affected art lending, Rose’s response was upbeat.

“Every business is facing the same liquidity crisis at the moment.” He continued to state, “we are seeing a fair amount of demand. Surprisingly in this market we haven’t seen the for-selling that one may have expected in this recession.”

How are artworks valued and has the current recession depreciated these values

Art Finance Partners utilizes basic valuation strategies when determining the value of the artworks lent upon. Their strategy consists of referencing established auction prices for comparable artworks through online databases like ArtNet or AskArt. In the case of a rare artwork, they consult their database of private sales, or get the opinion of an appraiser or art dealer.

Art Valuation Facts:

Loan to value ratio: 40-50%

General value of artworks down 20-30%; ultra contemporary artworks down 50%

Andrew Rose ends the interview stressing that good quality artworks sell well. Although trends and tastes change, Rose reiterates: “there will always be demand for very good quality international artwork on the international market.”

Related posts:

Subscribe to Art Radar Asia for more market and auction house news

SF/KCE

Posted in Acquisitions, Advisors, Business of art, Collectors, Interviews, Recession, Resources, Services | Tagged: , , , , , , , , , , | Leave a Comment »

Sotheby’s still willing to lend against art – New York Magazine

Posted by artradar on November 6, 2008


ART AS COLLATERAL 

One art-world business is booming: collectors looking to borrow against works they own, especially before the fall sales threaten to lower values. “We’ve been contacted by lots of people who are feeling some sort of margin call,” says Sotheby’s CEO, Bill Ruprecht. Other lenders have virtually stopped lending against art recently, but Ruprecht says Sotheby’s is still “very comfortable” doing so. (At 2007’s end, the auction house had $176.4 million loaned out; by the middle of this year, it was $212 million.) Tobias Meyer, who runs the contemporary-art department, says he’s also seeing more “consignment advances”-sellers agreeing to put their art on the block and getting some money up front. But he’s also finding owners disappointed by their holdings’ worth. “Just because we sold a great, rare $80 million Francis Bacon, everyone with a Bacon thinks theirs is worth $40 million,” he says. “It doesn’t work that way.”

See more on art recession, market watch, auction house news, original story in New York magazine

Stay up to date, click here to subscribe to Art Radar Asia 

Posted in Auctions, Market watch, Recession | Tagged: , , , , | Leave a Comment »