Bankrolling Your Art: It Can Be Pretty, Or Not

A Picasso

A Picasso being sold to finance a real estate development

Borrowing money on the strength of one’s art is a bit like bungee-jumping.

This waxes poetic, but it hits home. How is art valued anyway? I’ll never understand that process. Art isn’t a commodity that’s bought and sold frequently on the open market so that you could get a rough estimate of price. Years go by between acquisitions. There aren’t many opportunities to re-value. The Art Newspaper has a great article on this issue.

Art was seen as everything a banker disliked—volatile, not liquid, far from homogeneous and with no enforceable documents of title.

However

[An] unprecedented numbers of works of art are now being used as security for loans…up between 40% to 50% in the past six months

If there is a silver lining in the art world with respect to this downturn we’re in, it’s that tons of seldom seen or little known pieces of art are now coming out of the woodwork. Check out this Picasso…

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