Collecting and appreciating different forms of art is a very enriching interest and hobby. But more than the creative stimulation it provides, owning artworks is also a good way to diversify your portfolio.
How Artworks can help you Financially
Aside from adding variety to your assets, your artworks can also be a source of capital or cash for whatever need you may have, and you can do that either through selling one or more of your pieces or simply using them as collateral for a loan.
The most obvious way to turn an artwork to cash is through selling it. However, this may not be an appealing option especially if you have an emotional attachment to a particular piece.
If you want to retain ownership over your artwork and tap its monetary value, you can simply use it as a guarantee for a loan. Some lenders simply take an artwork as collateral and give you an offer based on its appraised value. Meanwhile, others will ask for another form of assurance, which basically means that if the loan defaults, they can tap your other assets to recover the amount you borrowed.
Biltmore Loan and Jewelry has a simple and practical approach when you want to tap the value of an artwork and turn it into cash. You can either sell it to us or you can apply for an art loan. All you need to do is get in touch with us and send the necessary information about the piece you want us to look into, so that the appraisal, which is free of charge, will be faster. We will give you an offer based on that and any other information about the piece that we may ask from you.
Reasons to Apply for an Art-Secured Loan
Data from the Art & Finance Report 2014 by Deloitte Luxembourg and ArtTactic shows that people take art loans for different reasons, but majority are doing it in order to buy more art. In fact 58% have done so in 2014. Meanwhile, 38% invested the loan amount on other business ventures, and 9% used the money to refinance another loan.
Regardless of what your reason is, using an artwork as a loan guarantee is becoming a growing trend and an effective way to access more cash without losing ownership over an art piece. In fact, approximately $3 billion are in art-secured loans, according to data from Skate, ARTnews business intelligence unit.
Art as an Investment
More than the creativity and soul put into an artwork, more and more people are becoming more aware that buying works of art can be a good investment.
“Larger online art marketplaces are likely to increase liquidity, broaden the collector base, reduce transaction costs, and increase transparence, which could encourage more people to look at art as an asset class,” the Art and Finance Report 2014 reveals.
Furthermore, an artwork’s value may appreciate overtime, making it a substantial part of your portfolio. If you want to make a business move or need to cover an unexpected expense, you can use a piece or two in your art collection to access cash without having to tap into your bank accounts.