Art Finance: A commentary on the impact of coronavirus

Man looking at a painting in an art gallery- the impact of coronavirus on art finance market

Over the past weeks, we’ve experienced a heightened level of engagement with top art collectors and investors regarding our art loan product and are having thoughtful discussions about how best to support their liquidity needs.

Globally, the art world has been witnessing “temporary” closings of art galleries, museums and auction houses, as well as cancellations of well-known art fairs. It’s too early to tell what this new paradigm will bring, or to truly understand what the longer-term effects will be. Clearly, all art market players will be compromised to some degree and Athena Art Finance is working creatively to understand how to best serve the art community through our financing options.

During this difficult time, we’re actively working with art collectors that are searching for alternatives to raise cash for other investment opportunities. An art loan can be a great option since the underlying asset has been fully equity financed, resulting in a significant amount of net cash for redeployment.  

Woman looking at a painting in an art gallery- impact of coronavirus on the art finance market.

For the foreseeable future, we’re expecting increased loan growth in our art finance vertical, which is expected to lead to more investment opportunities for Yieldstreet investors interested in this particular asset class. We expect this activity to ramp up due to the uncertainty surrounding the Spring auction season, lack of auction guarantees, and canceled art fairs globally, which we expect to lead many to consider Athena’s art financing solutions. For those collectors unable to secure auction house advances or those who anticipated cash proceeds from art sales post-auction, Athena offers creative credit solutions that can be made available in a timely manner. 

Because the works of art that fit Athena’s criteria are by established artists that typically maintain their value over time, we look forward to being responsive to these collectors, investors and dealers that hold such art, and to working together to meet their immediate financing needs.

Athena Art Finance follows a very disciplined underwriting approach that is focused on the unique risks of the global art market. As an asset-based lender against blue-chip art, we first determine if the proposed collateral meets our strict eligibility criteria. This process encompasses a detailed analysis of the artwork collateral and comprehensive research regarding authenticity and title.  All borrowers are diligenced for creditworthiness, and loans are properly structured based on borrowers’ unique financing needs.

We look forward to new and continued conversations to be a source of liquidity during these unprecedented times. For additional questions, please feel free to reach out to Naomi Baigell, Managing Director of Client Relations, [email protected].

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