Art Finance

We accept loans starting from £1 million and above, offering access to a broad range of lenders comfortable with various loan sizes. The loan-to-value (LTV) ratio typically ranges from 30-50%. The value considered for the loan is based on the low auction estimate, not the often higher insurance value, ensuring a conservative and accurate loan valuation. While we don’t have a preference for specific types of art, movements such as Old Masters may require more extensive due diligence.

The terms you are offered for fine art finance will be unique to you, and there is little room to guess what you will be offered without putting forward your art for consideration. The very best rates could be as low as 2-3%, although these are relatively exceptional cases. At the top end of the scale, you might see rates of 9%, and double-digit rates aren’t unheard of. The considerable span in interest rates only serves to underline why working with a broker like Enness can be so beneficial: there are very significant savings to be made if you work with a partner who can secure the most advantageous rates. 

Enness works primarily with private banks and specialised lenders for art finance, leveraging a wide database of lenders with various profiles. Each lender has unique advantages and disadvantages, which are carefully weighed when choosing the best fit for a specific artwork or collection. This ensures tailored solutions that meet the client's needs, whether they prioritise flexibility, speed, or loan terms, making the process more efficient and aligned with the specific characteristics of each enquiry.

While taking loans and raising capital can be a necessity for individual or business reasons, art ownership is almost always personal, even when it is principally an investment. The mix of personal and financial motivations can be complex to traverse, and there are several angles Enness will help you consider when it comes to art-backed finance. 

Firstly, it’s essential to know that most lenders will not allow you to keep the art in your possession or in its present location if you use it as collateral for a loan. Generally, your location (and that of the art) will dictate whether you can retain possession of your art. The US has codes that will allow for this for example, as do some European countries, although others don’t. Lender appetite also plays a big part even if local laws theoretically enable you to retain art you have borrowed against. Many lenders simply won’t consent to it.

If you want to keep possession of your art and Enness secures an offer that will allow you to do so (in line with local laws), other factors need to be measured. Your art will need to be regularly appraised so the lender can ensure it remains undamaged, authentic and it hasn’t dropped in value. Because this requires more of an investment from your lender in terms of appraisals and valuations, and the loan carries more risk because the art isn’t in their care, you will pay more for this type of fine art finance. Insurance will also be a significant consideration, and you will need to seek expert guidance on coverage in what is both a delicate and unusual situation. You will want to ensure additional insurance and higher loan costs will make sense for you from a financial perspective. 

As with any loan, there are consequences if you default. Lenders generally offer fine art finance between 30%- 40% (in exceptional cases, sometimes a little more) of the value of your artwork. The low loan-to-value ratio reflects the risk lenders take on and the fluctuating value and demand for fine art: lenders need to ensure they have a margin if the art’s price drops rapidly during the period of your loan. Lenders will sell art as a last resort, but it has happened, and if they do so, you stand to lose much more than you have borrowed. Understanding the risks of art-backed finance and having a solid exit plan is imperative. By doing so, many individuals are hugely successful in using this type of finance. 

How you plan to exit an art-backed loan will be essential to getting the best loan. While you can sell your artwork to raise funds to pay off your loan, many people wish to retain their art to benefit from the long-term appreciation it offers. Lenders are keen to do business and are generally happy if you opt for this route. However, you will need to have a solid game plan in place that Enness can present to lenders, detailing how you plan to pay back the loan with other funds. 

The process of securing a loan backed by art involves several key steps to ensure both borrower and lender protection.

Step 1: Initial Consultation and Assessment

The process starts with a free consultation to assess the client’s financial needs and the artwork’s suitability as collateral. Clients provide provenance records, proof of ownership, and high-resolution images for review. Enness Global then identifies suitable lenders from its database, usually presenting 2-3 financing alternatives within 1-2 weeks.

Step 2: Indicative Terms and Engagement
Once a lender is selected, the client signs indicative terms outlining the loan’s key details—loan-to-value ratio, interest rate, and repayment terms. Enness also conducts KYC and AML checks at this stage, marking the formal start of the loan process.

Step 3: Due Diligence and Valuation
The lender performs thorough due diligence, including AML compliance, authenticity verification, and a full valuation by an expert. This stage determines the final loan terms and usually takes 2-3 weeks.

Step 4: Loan Documentation and Fund Release
After due diligence, loan and security documents are finalised. Upon execution, the loan is disbursed, giving the client immediate access to liquidity as per the agreed terms.

For many high-net-worth individuals, keeping the details of your art collection confidential will be extremely important. Privacy is paramount if it is not public knowledge that you are the owner of the art for security and privacy reasons. Naturally, you may also want to ensure that there is confidentiality around the fact that you wish to use your art as collateral for a loan, regardless of your motivation for this type of financing.

For their part, lenders will want to perform their own due diligence, both on your art and your ownership of it. Lenders will verify that you are the owner of the art and authenticate your ownership's provenance, plus that of previous owners. Ensuring that the art is authentic is also a critical point for lenders.

Enness only work with the best lenders in the field of art financing. Any lender Enness approaches for art-backed financing understands the requirements of operating in this part of the market: confidentiality, dependability and discretion are all standard.

However, if required, Enness will be able to keep the details of your ownership confidential in the initial stages of negotiations. To do this, your broker can provide details of the art you wish to secure collateral against and give basic details of your profile without revealing your complete identity. Lenders can give in initial "in principle" style offers to Enness as a well-known party with a trusted reputation. That said, the terms and finer details will require that you give the green light to share more information with lenders in the form of documentation, photographs, specific details about the art and other relevant information. However, many clients appreciate being able to have Enness negotiate starting offers while maintaining confidentiality in the initial stages of art-backed financing.