The Seven Things You Should Know About Art Finance


The practice of using art as collateral for a loan has seen significant growth recently. Collectors are increasingly managing their art with an economic eye, and are exploring art financing as a way to re-deploy capital locked-in their high-value passion asset.
To help you get to know our newest asset class, we’ve outlined the 7 things we think you need to know about Art Finance.

FACT 1: With an influx of new buyers, the Art Finance market is growing, particularly for those whose borrowing needs can’t be met by traditional banks.

The 2018 Art Basel/UBS Art Market Report showed that while there are still a limited number of collectors at the top end of the market, the market continues to grow, reaching $63.7B. This asset class is expected to expand even further as more financial institutions become comfortable with Art Finance. Currently, there are two groups that commonly use art lending: private collectors looking to reinvest capital, and art market professionals, namely as galleries and dealers whose finances don’t meet a traditional bank’s narrow lending criteria.


FACT 2: Art Finance is growing year-over-year.

As the value of art rises, it is becoming a more meaningful part of a collector’s net worth. Prior to purchase, today’s collector is increasingly focused on an artwork’s future potential to appreciate, and through which trusted sales channel such value can be best realized. Selling an artwork can be quite challenging, however, given high transaction costs and other inherent expenses.

The Art Finance industry is being driven by art’s high value and relative lack of liquidity. Securing an art loan to fund other investment opportunities has become an increasingly popular alternative to selling. This enables collectors to extract liquidity from their art collection and reinvest the loan proceeds into higher yielding traditional or alternative investment offerings

FACT 3: Borrowers request loans at many points in an economic cycle.

Like most markets, the art market is cyclical. During a downturn, borrowers often look for liquidity, without losing ownership of their works of art. During an upturn, borrowers feel confident enough about their future finances to acquire new art, or they borrow rather than sell to avoid paying large capital gains taxes.

Regardless of market conditions, blue chip art with strong provenance by the top 200 artists, like Warhol or Picasso, have historically retained their values well.


FACT 4: The U.S. is a leader in the art lending space.

The U.S. is a leader in art lending for two reasons. First, the regulatory and legal landscape is among the most accommodative for secured lending activities. Second, the relative market size and activity level lends itself to growth. There is a growing demand globally, which is expected to grow in multiple geographic areas, most notably in China.

FACT 5: Artworks created by artists with established track records are generally the most valuable.

While ‘hot’ emerging artists may demand high prices for their artworks in today’s market, their valuations are subject to greater future volatility. Loan collateral should at least maintain its value, and past performance through various economic cycles is our best indication of future stability. It is preferable that the art used as loan collateral is supported by a deep buyer base that could provide a ready bid at any point in the cycle.


Invest in Art Today

FACT 6: Data is playing a larger and larger role in Art Finance, especially in evaluating risks in loans.

Data is critical. Market data and intelligence are key components of valuation and credit underwriting. YieldStreet / Athena Art Finance uses public data to derive proprietary analytics specific to an artist to help them understand an artist’s relative liquidity in the marketplace.

FACT 7: Often, the biggest barrier for borrowers is knowing that this type of financing is available.

It’s important for art collectors and art dealers to be aware of the financial products now available to them, and how using their art as collateral can help them achieve their financial goals. As we see it, Art Finance’s single largest limitation is awareness.

This communication and the information contained in this article are provided for general informational purposes only and should neither be construed nor intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Any link to a third-party website (or article contained therein) is not an endorsement, authorization or representation of our affiliation with that third party (or article). We do not exercise control over third-party websites, and we are not responsible or liable for the accuracy, legality, appropriateness or any other aspect of such website (or article contained therein).
How helpful is this content?

Share this article:

Sign up for Yieldstreet in 3 easy steps

Sign up with your email address

Securely verify your identity and link a bank account

Verify your accreditation (if applicable) to access all of Yieldstreet’s offerings.

The Yield

Our weekly podcast providing ideas about how to make money work for you and bring you closer to your dreams.

Since inception, over $2.2B has been invested on Yieldstreet

Join today for free to access alternative investment opportunities.

1 Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

3 "Annual interest" or "Annualized Return" represents an annual target rate of interest or annualized target return and "term" represents the estimated term of the investment. Such target interest or target returns and estimated term are projections of the interest or returns and or term and may ultimately not be achieved. Actual interest or returns and term may be materially different from such projections. This targeted interest or returns and estimated term are based on the underlying investments held by the applicable.

4 Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

5 Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

6 The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including Dec 22th, 2021, after deduction of management fees and all other expenses charged to investments.

7 Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Prism Fund before investing. The prospectus for the Yieldstreet Prism Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to The prospectus should be read carefully before investing in the Fund. Investments in the Fund are not bank deposits (and thus not insured by the FDIC or by any other federal governmental agency) and are not guaranteed by Yieldstreet or any other party.

8 This tool is for informational purposes only. You should not construe any information provided here as investment advice or a recommendation, endorsement or solicitation to buy any securities offered on Yieldstreet. Yieldstreet is not a fiduciary by virtue of any person's use of or access to this tool. The information provided here is of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of this information before making any decisions based on such information.

300 Park Avenue 15th Floor, New York, NY 10022


No communication by YieldStreet Inc. or any of its affiliates (collectively, “Yieldstreet™”), through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing on this website is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on the website (including amounts of principal and interest repaid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment, which are contained in the investors’ portfolios. Any investment information contained herein has been secured from sources that Yieldstreet believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor.

Private placement investments are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by Yieldstreet or any other party, and MAY lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.

Investments in private placements are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Additionally, investors may receive illiquid and/or restricted securities that may be subject to holding period requirements and/or liquidity concerns. Investments in private placements are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.

Alternative investments should only be part of your overall investment portfolio. Further, the alternative investment portion of your portfolio should include a balanced portfolio of different alternative investments.

Articles or information from third-party media outside of this domain may discuss Yieldstreet or relate to information contained herein, but Yieldstreet does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party articles, do not constitute an approval or endorsement by Yieldstreet of the linked or reproduced content.

Investing in securities (the "Securities") listed on Yieldstreet™ pose risks, including but not limited to credit risk, interest rate risk, and the risk of losing some or all of the money you invest. Before investing you should: (1) conduct your own investigation and analysis; (2) carefully consider the investment and all related charges, expenses, uncertainties and risks, including all uncertainties and risks described in offering materials; and (3) consult with your own investment, tax, financial and legal advisors. Such Securities are only suitable for accredited investors who understand and willing and able to accept the high risks associated with private investments.

Investing in private placements requires long-term commitments, the ability to afford to lose the entire investment, and low liquidity needs. This website provides preliminary and general information about the Securities and is intended for initial reference purposes only. It does not summarize or compile all the applicable information. This website does not constitute an offer to sell or buy any securities. No offer or sale of any Securities will occur without the delivery of confidential offering materials and related documents. This information contained herein is qualified by and subject to more detailed information in the applicable offering materials. Yieldstreet™ is not registered as a broker-dealer. Yieldstreet™ does not make any representation or warranty to any prospective investor regarding the legality of an investment in any Yieldstreet Securities.

Banking services are provided by Evolve Bank & Trust, Member FDIC.

Investment advisory services are provided by YieldStreet Management, LLC, an investment advisor registered with the Securities and Exchange Commission.

Our site uses a third party service to match browser cookies to your mailing address. We then use another company to send special offers through the mail on our behalf. Our company never receives or stores any of this information and our third parties do not provide or sell this information to any other company or service.

Read full disclosure
Copyright © 2022 YieldStreet, Inc.