“An art loan seems complicated, but it’s quite easy“

Thomas González has always had a passion for art. 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 $133 million. We, at The World Art News, have had the pleasure of interviewing Thomas to learn the ins and outs of being an art banker. In this two-part series, you will discover his secrets to running a successful art loans business.

What inspired you to enter the art loans business?

I never planned to become an “art banker.” My passion for art led me to study art history at university. While studying, I worked for ArtNet.com and organized art shows. Later, I became an art dealer, specializing in antiques and early sculpture. Throughout these experiences, I often found myself in need of liquidity. I couldn’t accept that I couldn’t secure a $10,000 loan from a bank for an artwork I had just purchased for $100,000. To bridge this gap, I developed a mechanism, initially involving friend-investors. Over time, this business grew exponentially, and since 2009, I’ve focused solely on art loans.

“I just couldn’t accept that I couldn’t get a $10,000 loan from a bank for an artwork I just bought for $100,000“

What sets you apart from your competition in the art loans industry?

I believe part of my success stems from my background in the art world rather than banking. Clients feel I have a better understanding of them and their situations.

From a business standpoint, we operate under a European jurisdiction, which is more client-friendly. Our loans are non-recourse, meaning the artworks serve as the sole collateral. In contrast, many Anglo-American contracts impose a “limited liability,” requiring a personal guarantee in addition to the artwork as security. We don’t operate that way.

Another significant difference is our jurisdiction’s prohibition of fees. With us, clients only pay an annual interest rate between 6.5% – 8.0%. In contrast, most other lenders charge closing, renewal, legal fees, as well as costs for appraisals, insurance, and storage. We cover all those expenses for our clients.

Moreover, many of the other major lenders are also involved in art dealing or are auction houses themselves. We are a private bank and have no interest other than in the interest payment.

“All you pay is the annual interest rate between 6.5 – 8.0%”

Is the art loan business difficult, and how did you make it profitable?

For many individuals in the art world, the concept of art loans may appear complex, but in reality, it’s relatively straightforward. Initially, winning over clients can be challenging, but once they engage with our services, they tend to remain loyal, utilizing our offerings to expand their businesses or art collections. Similar to the gallery industry, success in this field often hinges on long-term relationships and strategies.

“You only succeed in the long run”

Who are your clients, and what countries do they come from?

We operate globally. The majority of our clients, spanning different age groups, hail from the United States, Great Britain, Switzerland, and Asia. Interestingly, we have very few clients from Germany!

Where do you store your clients’ art?

We offer storage facilities in Switzerland and Germany, allowing our clients to choose the location that best suits their preferences.

What is the single biggest loan you have ever provided?

We prioritize the discretion of our clients’ information. However, I can share that we are capable of facilitating loans of up to $25 million without difficulty.

“Loans up to $25 Million aren’t a problem”

What is your minimum loan amount?

Our minimum loan amount is 500,000 Euro.

How does one secure an art loan from your company?

To secure an art loan, simply provide us with the details of the artwork, and we’ll extend an offer equivalent to approximately 50% of its market value.

How do you qualify a client for an art loan?

Given that artworks serve as the sole collateral, our primary focus lies in assessing the quality and market potential of the artworks. We only provide loans against art with a robust international auction market potential.

Is loaning money against art a risky business?

Over our 13 years in operation, we’ve encountered minimal problems or defaults. While some transactions may experience delays, we always work collaboratively with our clients to find solutions. We trust our clients’ knowledge of their art and its market liquidity.

Do you help your clients buy or sell art?

Our loan services encompass both public and private sales throughout the loan term. Additionally, clients can secure a loan from us in advance to acquire artworks. Our legal team customizes contracts according to the client’s specific requirements.

Are there any setbacks you’ve encountered during your 13 years in the art loan business?

Fortunately, we’ve navigated our business without major setbacks. Initially, convincing banking partners of the significant value of artworks, such as oil on canvas, proved challenging.

“So far we have never had any major problems”

As an art lover I learned how a banker thinks and feels so I consider myself an ambassador between the finance and the art world. Both have a very different understanding of each other’s businesses so I’m here to bridge this divide.

After 26 years in the art sector, what is your overall outlook on how this market is developing?

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 further.

PART 2: Exclusive Interview with Thomas González

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