Art as loan collateral

What is art financing?


Art financing is available to collectors who have significant liquidity and can pledge internationally-marketable art as collateral. Many loans require a personal guarantee (recourse loans), and the rates offered are typically lower than non-recourse loans. These loans are a unique way to create extra liquidity out of a traditionally illiquid asset.

There are many tailored loan structures to help meet your needs, whether it is to raise capital or to diversify your wealth portfolio. Collateral can be a diverse selection of top-quality high value paintings, sculptures, or drawings.

Some lenders conduct confidential valuations of your artwork on an annual basis. This allows for discretion and confidentiality while avoiding exposure of your collection to third-party appraisers.

In the US and Canada art collateral can typically be held in your homes or offices, or even internationally at an accredited museum while on loan to an exhibition. There are other specific international locations where art can also be held as collateral.

Coins, guns, collectibles, musical instruments, jewelry or gems, antiques, collector cars and wine typically do not qualify as art-loan collateral.


How art financing works


Once you have provided the lender with required personal financial information along with information on the artwork, including images and bills of sale, lending values are assigned to each object.

The loan-to-value ratio is typically around 50% for art loans. The lender can create a structure and term that works for you as a term loan or revolving line of credit.

In the US and Canada, the art will remain in your possession for you to enjoy, while a UCC filing (lien) is placed on each individual work. The art is typically inspected and revalued yearly and must be adequately insured.

Your capital begins working for you -- loan proceeds can effectively be used for any purpose; many borrowers are looking for extra liquidity to buy more art, or to use as an arbitrage to invest into their businesses, into real estate, or other high-yield investments.

As art can be relatively illiquid, art financing is a way to unlock the value in an asset without selling it prematurely. 


Trends in art financing


As the world becomes increasingly global, so too do the financial offerings. Lenders can now find new solutions to collateralizing art in international locations. While still relatively limited due to laws of perfection in each country, the rise of art loans backed by collateral not physically located in the US is increasing.

Most art loans use paintings and sculpture as collateral, and as the market continues to expand globally, new media are often also accepted in cases where the artist’s market is internationally robust. Installations, video and other non-traditional media can also work as collateral on a case-by-case basis. 

While some such artworks have sold for millions at auction, NFTs are still rarely used as collateral for mainstream lenders. Lenders who accept them may have additional requirements to compensate for the higher risks involved compared to more traditional art ownership, including concerns around authentication, value and market liquidity.




You may be able to borrow up to half of the appraised value of your art by using it as loan collateral, but please note all credit is subject to credit approval.

A diversified blue-chip and internationally-marketable collection is well-suited as collateral, regardless of genre. It can remain in your possession for you to enjoy in many cases.

Globalization is creating new opportunities for art finance and new, non-traditional types of media may qualify as collateral, although NFTs are yet to see widespread acceptance.