Based in Berlin and established in 2009, Thomas González Art Loans lends to dealers and collectors wanting to invest in art. We asked founder Thomas González, about his company and the state of the art market.
Why should someone use art financing?
Thomas González Art Loans offer art loans as a way of financing dealers and collectors.
For art dealers it is a chance to purchase new works when they find interesting opportunities. Dealers are used to financing structured to share deals with business partners. This kind of financing is much more expensive in comparison to getting an art loan with us. We do not ask for a share of the dealer´s profit we just set a predetermined interest rate. As the competition among dealers is getting stronger and stronger, art loans allow dealers to strengthen their market position and improve their buying power.
Our other customer group is art collectors, they are always looking for ways to develop their collection. With art loans, they can work with liquidity, rather than being bound by their collection. Thus, they do not have to sell other works and escape the huge sale fees usually connected with this.
What are the main kinds of deals that you are doing?
The main deals we are doing have an average loan of €1 million to €15 million and are secured by clearly documented blue-chip artworks dating from the 20th century (real non-recourse).
Where do you get your funding from?
We get the funding for the loans we arrange from private family offices.
What is the maximum loan you could do and would you syndicate?
We do not offer syndication, however, depending on the quality of the collateral, we can offer financing up to €50 million per client, on our own.
What is your perfect deal?
My perfect deal size is €10-€15 million. The easiest type of art to lend against is 20th century, blue chip art (painting, sculpture, works on paper). Sometimes we do also cover other collecting fields.
I like dealers a lot, as they usually have a hard time with banks they appreciate my service even more. I studied history of art and was an antiques dealer myself for 15 years before I got into the art lending business. So I understand dealers very well. They like me too because I am not a pure banker like 99% of my competitors. Today, I don’t deal anymore – there is no more time! So I turned into a private collector.
Do you require guarantees?
One of our big advantages over the big Anglo-American institutions is that we offer real and straight-forward “non-recourse” loans. That means the artworks are the only security for the loan. We don’t need further guarantees, but this also means we do need to take possession of the collateral, which can be stored in a storage facility close to the client.
What advice are you giving your clients in the current market?
If you find an interesting opportunity, take advantage of it now. Although lending rates in the art financing industry are usually higher than bank loans, with personal guarantees, the current low-interest-period definitely exerts its influence on rates in art financing. In many cases, the annual increase in value of high-quality artworks exceeds the costs of a loan.
What trends are you seeing?
We are still in the early days. The market for art loans will be constantly growing. This service will no longer be considered exotic and people will get used to the idea of taking out a loan against their collection, in the same way they are now used to loaning against real estate or other valuable assets.
What are your predictions for the market?
The boom in the art market we are facing now must be seen in correlation with global developments in the financial and economic sphere. Many people do not know where to invest their money. Art is doing well because of its liquidity.
Why do you think prices have risen?
In contrast to classical investments that perform poorly, the art market is getting more and more attractive for the big fortunes. There are many new big collectors coming from Russia, China and the Middle East growing the market. We predict that this trend will continue.