Art-secured lending

What is an art-secured loan?

It is a loan for which you pledge your art collection: the works serve as security, as collateral. The collection remains yours; it simply becomes the lender's guarantee. This makes it possible to raise money without having to sell works you love.

How does it work?

The principle is the same as pledging a property, only instead of a house you pledge artworks. The lender values the collection and provides credit against its value; as long as you keep up the repayments, the works remain yours. The collection thereby gains a financial function on top of being an ornament on the wall.

Why does it matter to a collector?

Because it lets them use the value of a collection without losing it. They obtain the money and keep the works. That is useful when capital is needed for further purchases or other investments. According to the data, 61 per cent of younger collectors would use such a service, which shows there is appetite for it.

What should you watch out for?

Here this service is still the exception, whereas abroad it is part of the standard offering. It is therefore an area into which the market has yet to grow. Until it spreads, count on terms and availability still taking shape here. It is also worth remembering that this is still a loan, to be repaid, and that the collection stands as security for it.

— Anna Pulkertová, founder of Art Part Club