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

Thomas González 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 $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 exclusive two-part series you will discover his secrets to running a successful art loans business. Let’s begin!

What inspired you to enter the art loans business?

I never planned to become an “art banker”. I always loved art, so I studied art history at the university. During my studies, I was already working for ArtNet.com and organizing art shows. Later on I became an art dealer, specializing in antiques and early sculpture. During these years I was always short of liquidity so I started looking for funding partners. 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. I developed a mechanism to fill that gap, first with some friend-investors. This business started to grow bigger and bigger to a point that I do nothing but art loans since 2009. 

“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 think part of my success is that I come from the art world and not from banking. My clients feel that I better understand them and their situation.

Business-wise, 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 must give a personal guarantee on top of your artwork as security. We don’t do that. 

Another big difference is that in our jurisdiction – fees are not permitted. So all you pay is the annual interest rate between 6.5 – 8.0%. Most other lenders charge closing, renewal, legal fees, as well as the costs for appraisals, insurance, and storage. When you work with us, we cover all of those expenses for you. 

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

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.

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

For most art people, an art loan seems complicated, but it’s quite easy. It’s hard to win a client at first, but once they are with us, they stay forever and use our service to grow their businesses or art collections. As in the gallery world, you only succeed in the long run.

“You only succeed in the long run”

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

We work worldwide. Most of my clients (young and old) come from the United States, Great Britain, Switzerland, and Asia. Funny enough, almost nobody from Germany!

Where do you store your client’s art?

We store art in Switzerland and Germany; our clients pick the storage facility they prefer.

What is the single biggest loan you ever gave?

Please excuse me, we are very discreet concerning all information about our clients. However, I can tell you that loans up to $25 Million aren’t a problem for us.

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

What is your minimum loan amount?

Our minimum loan is 500,000 Euro.

How does one secure an art loan from your company?

Just send us the details of the artwork, and we’ll make you an offer of around 50% of its market value.

How do you qualify a client for an art loan?

Since artworks are the only collateral, we mainly look at the quality of the artworks. We can lend only against art with a robust international auction market potential.

Is loaning money against art a risky business?

So far, we have never had big problems or a default 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 art and its market liquidity.

Do you help your clients buy or sell art?

Our loans allow us to sell both publicly and privately during the term. You can also get a loan from us in advance to acquire an artwork. Our legal team adjusts the contract to the client’s needs.

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

Sorry, so far we have never had any major problems. In the beginning, it was hard to convince my banking partners that oil on canvas can have significant value. 

“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 more.

PART 2 of our Exclusive Interview with Thomas González

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