In the morning the picture, the money in the evening
Loans secured by works of art since the 2008 crisis have become increasingly popular
Source: According to the company Deloitte, 22 percent of private banks advise their customers to use art as collateral for loans, still 33 per cent of banks consider such a possibility. At the same time 78 percent of money managers wary of a similar type of transactions, as there is a problem of adequate valuation of the works, as well as forecasting the possible risks.
Today the market of loans provided by the works of art, is estimated professionals in the seven billion dollars, but if you have lots of pictures and little money, it does not mean that you have found an easy way to turn art into cash. The process of obtaining such a deal a long and expensive by itself, with such factors as the availability and cost of your other assets.
To make money, you have the money: you will easily get the loan secured by works of art, if you are the owner of the collection of $ 200 million, and quite good condition, and, besides, you have a good relationship with the private bank offering such services. In most cases, interest rates on such loans are high. Here we can recall, incidentally, the famous photographer Annie Leibovitz, who paid 44%of the loan , obtained under the guarantee of its own works.
In addition to high interest rates, institutions issuing these loans, tend to lay eyes on bail in the hope that the client can not cope with interest payments and the product will be beneficial to be auctioned off.
However, these loans have some advantages: it is, of course, the opportunity to earn a work of art, not selling it.
Banks are very serious about the issue of provenance and authentication products, and are reinsured with respect to alternatives to the existing mortgage of art and check all the property of the client, from securities to real estate. But even with all that secured loans of works of art since the financial crisis continues to grow in popularity and use them not only the most wealthy people.
Today, New York City - the capital of the art credit and not only because it is both the capital of the art market and the capital of the financial market. Another reason why this service is most advantageous to use it here - Uniform Commercial Code, which is in effect. According to this document, we can vouch for the loan of the art, is still hanging on the wall of your apartment. Only when a bank customer can not cope with interest payments on the loan, the bank has the right to seize the job. Thus, according to the code, the client has no right to object to move or transfer possession to others for the duration of the contract with the bank. But this condition is compared with that of other countries is very gentle: in the UK and other European countries, the bank in providing such services immediately withdraw the deposit from the client.
Prepared by Mary Estrova, AI
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