After testing out the art market in Australia, a lending business launched by entrepreneur and CEO Paul Becker is making its US debut at the annual EXPO Chicago fair, which opens to the public on Friday, September 23.
Art Money says it offers a simple and transparent way of making interest-free art loans, which range from $1,000 to $30,000, and are repaid over a 10-month period. The firm partners with galleries and negotiates a discount in lieu of the interest charge that would otherwise be paid on the loan. Buyers must pay a 10 percent deposit before taking possession of the work.
The price point represent a relatively lower tier of the art market, which will likely be attractive to new buyers. The lending strategy itself differs notably from most existing art loan models at banks and auction houses, where loan caps are typically set at half the fair market value of the work, and the artwork itself is used as collateral in an effort to minimize lender risk.
EXPO Chicago 2015, with work by Daniel Buren. Photo by Claire Demos, courtesy EXPO Chicago.
Works at EXPO Chicago range from a few hundred dollars up to seven figures, fair organizers say.
Art Money reports it has already made more than 500 such loans in Australia and has a network of 200 galleries there. “We’re about doing this slowly and properly. We’re here for the long term,” Becker said in a phone interview with artnet News. “We felt like Chicago was a good place to test the model live in the market. The fair is not too big and not too small,” he said, adding that EXPO director Tony Karman responded enthusiastically when he described the business model to him during a meeting at Art Basel in Miami Beach last year.
That Miami Beach meeting quickly turned into something lasting. “After a successful debut in Australia, we are proud that Art Money is introducing and launching their U.S. initiative at EXPO Chicago this year,” said Tony Karman, president and director of EXPO in an email to artnet News.
Art Money will have a dedicated booth at the fair this year. Asked about the relatively lower range and $30,000 cap of the loans, Becker explained, “it’s a price point that we’re really comfortable with. Obviously in dealing with much higher prices the due diligence process is longer.” In contrast, the online application process “can happen in 10 minutes,” he explained, including a credit check.
Becker says the response so far in Australia has been overwhelmingly positive. “Buyers are happy because they’re paying it off over time. Galleries are happy because they’re getting the money in 10 business days and they’re in a position to pay their artist. It’s really a win-win.”