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Art Lending: What It Is and Why It Doesn’t Work in Italy

Using artworks as collateral to access personal loans could invigorate young collectors. It’s a promising avenue to rejuvenate the contemporary art system. Yet, in Italy, there are many hurdles.



art lending

In recent years, the art and finance sectors globally have found a new way to collaborate: art lending. Stripping away the fancy jargon, art lending allows owners of one or more art pieces to secure personal loans by using those artworks as collateral.

The Italian Context: Limited Demand for Art Lending

In Italy, perhaps predictably, art lending remains a scarcely practiced concept. The reasons for this tepid adoption may shed light on the dynamics of our art system and its demographics, both in terms of collectors and financial stakeholders.

Starting with collectors: It’s well-known that young collectors are few in Italy, and a significant portion of collectors operating in the country come from a higher socio-economic background. Practically speaking, this translates to dealing with an economically well-off demographic. Many of these collectors often don’t require loans. And if they do, they can pledge other assets as collateral. From an economic standpoint, there’s a lack of demand, especially considering the niche market to which art lending caters.

Art Lending Challenges on the Supply Side

On the supply side, our banking system doesn’t always have in-house experts skilled in art valuation. Without this expertise, it becomes challenging to authenticate the value of artworks used as collateral. This means our banks would need to hire new, specialized staff. The presence of mature or “senior” collectors also hampers the growth of credit institutions. Raised in a different era and society, today’s collectors have, over time, honed their collection management practices, meaning they rarely utilize banking services.

Seeking Solutions and A New Collector Demographic

This situation hinders the growth of the offering: a more dynamic market could encourage financial institutions to employ specialized staff and develop varied services catering to the art world. If the management of artworks and collections is primarily done independently by collectors, and considering many of these collectors have substantial income and assets, not only is there limited demand for art lending services, but also for other related and potential services.

Given our scenario, art lending faces challenges in becoming commonplace. It demands that banks possess the infrastructure to verify and certify the value of artworks used as collateral—a structural condition that represents a cost, which might be difficult to offset with other services and would be challenging to sustain.

A solution could be fostering a younger group of collectors, including those who aren’t wealthy. They might not afford five-figure artworks but can start their collection with emerging artists. Such a collector demographic would comprise individuals more likely to need personal loans, even for smaller amounts, and would often face challenges due to a lack of collateral.

The Potential Impact of Art Lending on Contemporary Art and Society

Moreover, promoting this kind of collecting could stimulate our contemporary art market, especially for budding artists, positively influencing artwork pricing. Lastly, it’s worth noting that expanding the emerging art market would not only enhance contemporary art awareness among Italians (who, let’s be frank, aren’t shining stars in this area) but also introduce a dynamic of bringing contemporary art closer to society. Through the known dialogue of supply and demand, artists (or styles) could emerge that better resonate with our society’s cultural needs.

This would be a noteworthy outcome: contemporary art that speaks to the general public, not just art connoisseurs, could result in fascinating cross-pollination. The key might be encouraging purchases by young individuals not yet into collecting. But it seems we stopped trying years ago.


(Featured image by Steve Johnson via Pexels)

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First published in Be Beez. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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Andrew Ross is a features writer whose stories are centered on emerging economies and fast-growing companies. His articles often look at trade policies and practices, geopolitics, mining and commodities, as well as the exciting world of technology. He also covers industries that have piqued the interest of the stock market, such as cryptocurrency and cannabis. He is a certified gadget enthusiast.