Thomas González has always had a passion for art. So today, he arranges art loans and has committed himself to the art loan business. He has developed a trusted cadre of financial partners, responsible for successfully brokering art loans above one hundred million Euros.
We at World Art News have had the pleasure of interviewing Thomas in a two-part series to discover his secrets to running a successful art loans business.
Continue reading to learn the ins and outs of being an art banker.
What inspired you to get started in the art loans business?
I always loved art, so I studied the history of art at university. Already during my studies, I was working for artnet.com and organizing art shows. Later on, I was an art dealer specialized in antiques and early sculpture. In these years, I was always short of liquidity and started searching for funding partners. I couldn’t accept that you would not get a 10.000 € loan from Your bank for an object you just bought for 100.000 €. I developed a mechanism to fill that gap, first with some friend-investors. Then it became bigger and bigger, and since 2009 I do nothing but art loans.
I never planned to become an “art banker”. I think part of my success is that I come from the art world and not from banking. My clients feel that I understand them and their situation.
What countries do your clients primarily reside in and what is the mean age of your clients?
We work worldwide. Most of my clients (young and old) come from the U.S., Great Britain, Switzerland, and Asia. Funnily enough, almost nobody from Germany!
What type of storage facilities do you use to store your artwork?
We store artwork in Switzerland and Germany; our clients pick the storage facility they prefer.
What makes your business profitable after working with 34 satisfied clients?
For most art people, an art loan seems complicated, but it is easy. It’s hard to win a client, but once they are with us, they stay forever and use our service to grow their business or their collection. As in the gallery business, you only succeed in the long run.
What is the biggest single loan you ever gave out and what did your client purchase?
Please excuse us: we are very discreet concerning information about our clients. But I can tell you loans up to 25 Mio USD is no problem.
What is the minimum amount you accept and the average loan you provide for your clients?
The minimum loan amount is 500.000 €. The rest is as manifold as the art world.
What sets you apart from your competition in the art loans industry?
We use a European jurisdiction, which is much more client-friendly. Our loans are non-recourse, which means the artworks are the only collateral. Most Anglo-American contracts contain a “limited liability,” so you have a personal guarantee on top of your artwork as security. We don’t do that.
Another big difference is that in our jurisdiction, it is not allowed to take any fees. So all you pay is the annual interest rate between 6.5 and 8.0%. Most other lenders charge closing, renewal, legal fees, the costs for appraisals, insurance, and storage, but when you work with us, we cover all of those expenses for you.
Moreover, many of the other big lenders are also involved in art dealing or are auction houses. We are a private bank and have no interest other than in the interest payment.
How does a serious art buyer secure a loan from your company?
Just send us some details of the artwork, and we make an offer of around 50% of the market value.
How does the process of qualifying a client work for an art loan?
Since artworks are the only collateral, we mainly look at the quality of the artworks. We can only lend against art with a robust, international auction market.
What are the troubles, risks, and liabilities your clients face when securing a loan?
So far, we have never had big problems or defaults in 13 years. Sometimes things take longer than expected, but we always find a solution together with our clients. We believe our clients know best about their collection and its market.
How do you position your clients to sell through the loan term through auction houses?
Our loans allow us to sell both publicly and privately during the term, but you can also acquire artwork and get a loan from us in advance. Our legal team adjusts the contract to the client’s needs.
What are some failures and setbacks you encountered in your 13 years of working in the art loans business?
Sorry, so far we have never had any huge problems. In the beginning, it was hard to convince my banking partners that oil on canvas can have a significant value.
I consider myself a translator between the finance and the art world. Both have a very different understanding of each other’s business. In the meantime, I as, an art lover, also learned how a banker thinks and feels.
After 26 years of being in the art sector, what is your overall outlook on how the art market is changing?
The art market will expand much more in the future. Art has become an accepted global currency, much better and more sought after than cryptocurrencies. The Internet and globalization will enhance this development even more.
Read Part 2 of our exclusive interview with Thomas González where we cover topics like NFTs, advice to young entrepreneurs wanting to get started in the art loans business, types of art Thomas prefers to loan money against, and much more.
Are you interested in working with Thomas? Visit his website to learn more.
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