Fine art grows as a preferred asset for securing loans

Luxury asset-backed short term lender, Suros Capital, has seen loans secured against art increase by 55% so far in 2024 compared to the same period in 2023, with artwork representing 40% of the lender’s current loan book.

Suros says one of the reasons for the increase in clients using art to raise capital is the slowdown in art sales worldwide which has made many owners re-evaluate their options. 

According to Bloomberg, the major May New York auction season fell about 23% by value from the previous year. One of the by-products of this market correction has been the number of art owners who have decided to realise the value in their art portfolios by taking loans against them, to make use of the capital for other purposes while keeping control of the assets themselves.

According to Ed Blackmore, Suros Capital's business development director, the situation in other art centres across the world has been duplicated in the UK.

He said: “Suros Capital has kept track of the latest trend in the art world but considers it to be a correction caused by a cooling from record high valuations coming out of the pandemic. Even as sales have slumped and values have pulled back, we are finding that demand for art loans is expanding as owners recognise that their precious art can be useful to raise capital.

“Unlike some of the big banks, who cater for large art portfolios, we are happy to lend against a single item, but can lend up to £2 million against a collection. We are agreeing loans for other investment purposes, property development, tax bills and business opportunities and our introducers are predominantly intermediaries, including wealth managers, IFAs, mortgage brokers and auction house professionals.”