The paintings of well-known artists hanging on the walls add beauty and pride to your home. They can be your most treasured possessions. They can also help you in case you need cash. This is a new trend in the credit and loan industry that is growing at a faster pace. Getting a fine art loan is not easy, however. You have to consider a lot of things and these include:
Does my piece qualify as a collateral loan?
Sculptures, paintings and other artworks made by Alexander Calder, Pablo Picasso, Diego Rivera, Pierre-Auguste Renoir, Fernando Botero, Rene Magritte, Jacob Lawrence, Vincent Van Gogh and Mark Rothko are just some of those accepted as collateral for fine art loans. Some pawn brokers even consider the works of lesser known artists. Call them to make an inquiry.
Present the art to the creditor of your choice.
If you are new to the world of artwork industry, you may fall as an easy prey for unscrupulous buyers. Bring your piece to a collateral-based lender and they will provide you with free market appraisal. They will make an offer to you based on its value. Bear in mind that they have a network of art brokers, appraisers and dealers; hence, it is easy for them to determine the exact value of the creation.
Prepare all the data the lenders may possibly request from you.
A fine art loan is not a jewelry loan where you only present the gem and you will get your cash based on the appraisal. You will have to prepare some sets of information and documents that may assist you to get a higher amount of money and to speed up the borrowing process. These include the title of the art, its dimensions and medium, purchase receipt and of course, the name of the artist. It may also help if you search for relevant information over the Internet and include it as additional documentation.
You need the money but the truth is you are not comfortable with getting a loan in exchange of your art.
You’re not the only one who’s felt that way about art loans. All wealthy individuals do. Lenders are also taking a bigger risk. You have your piece of art to care for; they have their money and business to protect. They have to do background check and authentication to the piece to ensure profit. This is the reason some of them ask for other assets as additional collateral.
For your security, inquire about the insurance coverage of your high-valued item and the process of storage. Artwork is one of the things that requires climate control storage to maintain the condition of the piece. Your painting requires a certain temperature to protect it from moisture and exposure to UV.
Do you have other assets in case the creditor asks for it?
If what you possess does not have a bigger or huge value, like that of the works of world-renowned Picasso, banks and other lenders may require you to present other forms of collateral like equities or real estate. If you are borrowing from your bank, it may consider approving your art-backed loan if you will combine it with your whole balance sheet.
Ask yourself a hundred times: “Am I sure about applying for art loan?”
Ask yourself this question before signing a loan application form: “Why do I have to do this?” If you will use it to start or expand a business or invest on a new one, you are in need of art loan for a better cause. Other than these, you may have to think a hundred times. What you have is a pricey one. Its value appreciates as years go by. It may be better to keep it for a longer time.
There’s money hanging on your walls. Artworks of famous artists do not only add splendor to your home, they can also be considered as investments that you can sell or use as collateral for fine art loan.