Selling your artwork is an option if you need to free up funds, but you might be parting with a piece that you love, or one that could one day be worth far more than you sold it for.
Instead of selling your prized artwork for quick cash, use it to secure a short-term, asset-based loan. This may enable you to borrow money you need, without having to sell your artwork.
Determining the value of artwork
The amount that you can sell your artwork for depends as much on current trends in the art buyer’s market, as it does on the artwork’s estimated value itself.
If you’re going to sell, gather as much information about your artwork as possible. The more you know about its origin, provenance and creator, the better. Look for similar works of art online – whether by the same artist; from the same period or art movement; or from the same origin – to help you estimate the value of your art-piece.
If you have a very rare or valuable item, consider having it professionally appraised so that you know its real value before putting it up for sale.
Ways to sell artwork
There are a number of ways to sell works of art, each with certain considerations:
- You can get a good price if you sell your artwork online, but a sale is not guaranteed, the process can be slow, and there are often shipping and advertising costs attached.
- Selling your art privately allows you to be in full control of the pricing, but it can take quite a bit of time to find a buyer, and a sale is not guaranteed.
- Selling through a professional service removes the hassle of organising the sale yourself, but you’ll have to pay commission to the auction house or art dealer.
- Selling to a pawn shop is another option, but they will only take on stock that they think will sell, and – considering that they need to make a profit to stay in business – will offer you less for the artwork than its estimated resale value.
Borrowing against artwork
Using valuable artwork to secure a loan could suit you if you need cash urgently, and/or you don’t qualify for a traditional bank loan.
An advantage of securing an asset-based loan against your artwork, rather than selling it, is that you’ll avoid shipping costs, commission fees to auctioneers and dealers, and capital gains taxes.
Other advantages of using artwork to get a loan are that:
- funding is available almost immediately; typically you’ll have the money within 24 hours
- the process is completely confidential
- your credit record doesn’t have to be spotless
- you don’t have to part with the artwork; once you repay the loan with the agreed interest, it will be returned to you.
For more information about using an asset to secure a short-term loan, contact Lamna on 086 111 2866 or simply complete and submit our online application form.
ILLUSTRATIVE EXAMPLE
Client borrows R10,000 for 90 days.
Loan Amount | Repayment Period | Monthly Interest | Total Cost of Loan | Initiation Fee | Monthly Fee | APR |
|---|---|---|---|---|---|---|
R10 000 | 3 months | R500.00 | R2 914.50 | R1 207.50 | R569.00 | 60% |
Fixed rates range from 36% to 60% APR and payment options range from minimum 3 to maximum 24 months. Apart from the initiation and monthly fees shown below, the only additional fee is credit life insurance if the borrower does not have this already.