What exactly is an art-collateral loan?

It is a term loan secured by fine art. The borrower pledges one or more works as security, receives cash against a percentage of their appraised value, services interest during the term, and repays the principal at maturity, at which point the collateral is released.

Do I have to sell the artwork?

No. The work is pledged, not sold. Title stays with the borrower throughout the facility. A sale only becomes relevant if the loan is not repaid and the security is enforced.

How much can I borrow against a work?

Typically 40–50% of the independent low auction estimate, up to 60% for single blue-chip works with deep comparables, and 25–35% where the market is thinner or the pledge is concentrated in one artist.

Where is the artwork kept during the loan?

In a bonded, climate-controlled fine-art warehouse under our custody agreement, insured all-risk nail-to-nail at full appraised value with the lender named as loss payee. Client possession is an exception, not the norm.

How long does funding take?

Usually three to five weeks from the first work list to drawdown, covering appraisal, condition reporting, KYC, documentation, and custody transfer.

What happens if the value of the collateral falls?

Facilities include re-appraisal and margin provisions. If the loan-to-value moves materially beyond the agreed level, the borrower restores it through a partial paydown or by pledging additional works.

Yes, after month six, without penalty. Interest is charged to the repayment date and the origination fee is not refundable.

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— Art Loans

Liquidity secured by fine art collateral

Term facilities advanced against museum-quality works, structured with conservative loan-to-value, bonded custody, and full insurance. The terms below are indicative and confirmed only in a signed facility agreement.

What an art-collateral loan is

An art-collateral loan converts an illiquid asset into cash without a sale. The owner pledges one or more works as security, an independent appraiser sets their value, and we advance a conservative percentage of that value as a term loan. Interest is serviced during the facility, the principal is repaid at maturity, and the works are released. Collectors use it to fund acquisitions, meet tax or estate obligations, or bridge to a planned sale at a moment of their choosing rather than the market’s.

The work stays yours

You pledge the work as security; you do not sell it. Title remains with the borrower for the life of the facility and the collateral is released on full repayment.

The advance is set off the low estimate

We take the independent appraiser's low auction estimate, not the insured or retail value, and lend a percentage of it. That percentage is the loan-to-value.

Interest is serviced, principal is bulleted

Interest is paid quarterly and the principal is repaid in a single payment at maturity, from a sale, a refinancing, or other liquidity.

Collateral is controlled, not consumed

Works sit in bonded, insured storage under a custody agreement. If value falls materially, a margin call restores the agreed LTV through paydown or additional collateral.

Loan-to-value

Typical LTV

40–50%

Against the low auction estimate of the pledged work.

Maximum LTV

60%

Reserved for single blue-chip works with deep, liquid comparables.

Conservative band

25–35%

Thinner markets, emerging artists, or concentrated single-artist pledges.

Quick loan estimator

Estimate a facility

Enter the independent low auction estimate of the work or collection. This tool applies our indicative loan-to-value bands to show a possible advance range and eligibility. It is not a quote.

USD

Indicative only. No facility, rate, or advance rate is binding until set out in executed documentation. Subject to appraisal, diligence, custody, and insurance.

Facility size bands

USD 250,000 – 1,000,000
Entry facilities, usually one to three works, streamlined diligence.
USD 1,000,000 – 5,000,000
Core band. Collection-level pledges with bonded storage.
USD 5,000,000 – 10,000,000
Structured facilities, staged drawdowns, third-party valuation panel.
Above USD 10,000,000
Considered case by case, typically syndicated with fund co-participation.

Tenor and pricing

Standard tenor: 12–24 months
Extended tenor: up to 36 months
Renewal: One 12-month extension, subject to re-appraisal
Interest: 9–13% p.a., interest-only, quarterly
Origination fee: 1.5–2.5% of committed principal
Early repayment: Permitted after month 6, no penalty

Worked examples

Illustrative structures built from the ranges above. Figures are examples, not quotes, and every facility is priced on its own collateral and diligence.

Single blue-chip work

Collateral: One post-war painting, low auction estimate USD 4,000,000
LTV applied: 50%
Principal: USD 2,000,000
Tenor: 18 months, interest-only
Interest: 10% p.a. — USD 50,000 per quarter
Origination fee: 2.0% — USD 40,000, netted at drawdown
Net proceeds at drawdown: USD 1,960,000
Repayment at maturity: USD 2,000,000 principal plus final quarter interest

Collection-level pledge

Collateral: Six modern and contemporary works, aggregate low estimate USD 9,000,000
LTV applied: 45% — diversified pledge, deep comparables
Principal: USD 4,050,000
Tenor: 24 months with one 12-month extension option
Interest: 11% p.a. — approximately USD 111,375 per quarter
Origination fee: 1.75% — USD 70,875
Custody: Single bonded warehouse, nail-to-nail cover at full appraised value
Release: Partial releases permitted against pro-rata paydown

Thinner-market collateral

Collateral: Two works by a single emerging artist, low estimate USD 1,200,000
LTV applied: 30% — conservative band, concentrated single-artist risk
Principal: USD 360,000
Tenor: 12 months
Interest: 13% p.a. — USD 11,700 per quarter
Origination fee: 2.5% — USD 9,000
Condition: Additional collateral or a personal guarantee typically required
Outcome: Repaid at maturity or refinanced after re-appraisal

Eligibility criteria

Artists and periods

Post-war and contemporary, modern, and Impressionist works with an established secondary market.
At least three comparable public sale results for the artist within the last five years.
Emerging or single-market artists considered only at reduced LTV and with additional collateral.

Provenance and condition

Unbroken, documented provenance with no restitution or title disputes.
Catalogue raisonné entry or recognised authentication where one exists.
Independent condition report dated within 12 months of drawdown.

Borrower and jurisdiction

Borrowers in the United Kingdom, European Union, Switzerland, the United States, and Brazil.
Corporate, trust, or individual borrowers; full KYC, source-of-funds, and sanctions screening.
Security perfected under the governing jurisdiction of the facility (typically English or New York law).

Custody and insurance

Works held in a bonded, climate-controlled fine-art warehouse under our custody agreement.
Client-possession arrangements considered only on an exception basis, with inspection rights.
All-risk, nail-to-nail insurance at full appraised value, with the lender named as loss payee.

Process and timing

01
Indication
Work list, images, and provenance summary reviewed. Non-binding term sheet within five business days.
02
Appraisal
Independent valuation and condition report commissioned; LTV fixed against the low estimate.
03
Documentation
Facility agreement, security documents, and custody transfer executed.
04
Funding
Drawdown once collateral is in bonded storage and insurance is confirmed. Typically 3–5 weeks end to end.

Frequently asked questions

What exactly is an art-collateral loan?: It is a term loan secured by fine art. The borrower pledges one or more works as security, receives cash against a percentage of their appraised value, services interest during the term, and repays the principal at maturity, at which point the collateral is released.
Do I have to sell the artwork?: No. The work is pledged, not sold. Title stays with the borrower throughout the facility. A sale only becomes relevant if the loan is not repaid and the security is enforced.
How much can I borrow against a work?: Typically 40–50% of the independent low auction estimate, up to 60% for single blue-chip works with deep comparables, and 25–35% where the market is thinner or the pledge is concentrated in one artist.
Where is the artwork kept during the loan?: In a bonded, climate-controlled fine-art warehouse under our custody agreement, insured all-risk nail-to-nail at full appraised value with the lender named as loss payee. Client possession is an exception, not the norm.
How long does funding take?: Usually three to five weeks from the first work list to drawdown, covering appraisal, condition reporting, KYC, documentation, and custody transfer.
What happens if the value of the collateral falls?: Facilities include re-appraisal and margin provisions. If the loan-to-value moves materially beyond the agreed level, the borrower restores it through a partial paydown or by pledging additional works.
Can I repay early?: Yes, after month six, without penalty. Interest is charged to the repayment date and the origination fee is not refundable.

— Request an intro

Discuss a facility against your collection

Share your details below and our loans team will be in touch to arrange an introductory call. You can also email us directly at loans@arsenale.capital. Enquiries are answered within two business days.