ACG will loan against collateral worth as little as $200,000. Liquidity is a crucial factor. “A Picasso has a very large market, so we might advance 50 to 60 percent against it,” Peck explains. “Something esoteric like a rare musical instrument has a very limited market, so we might advance only 40 percent.”

Rates vary widely but can go into the mid- to upper teens, appealing more to clients who plan to sell the art quickly than to long-term borrowers. Clients are private collectors and professional art dealers. “Our highest rates are for deals where we go further on the advance rate, maybe 80 percent, for example,” Peck says. “We consider those venture deals and would probably have an exit strategy built in where we would sell the piece at auction.”

Typically, the art is stored in a warehouse for the length of the loan, but exceptions are made. “If a client says there’s a tour of Warhol paintings and he would like his to be included, we say fine,” says Peck. After all, inclusion in a major exhibition increases the value of the collateral—and that’s good for lender and borrower.

---

A contributor to Art & Antiques for 10 years, Philadelphia writer Cathleen McCarthy profiled ceramic artist Cliff Lee in December 2006.

FOR MORE INFORMATION

---

►Christie’s Trusts, Estates and Appraisals
New York. 212.636.2400
www.christies.com

►Sotheby’s Financial Services
New York. 212.894.1144
www.sothebys.com

►Citigroup Private Bank
New York. 212.559.5466
www.citibank.com/privatebank

►Bank of America Private Bank
Los Angeles. 213.621.7487
www.bankofamerica.com/privatebank

►Art Capital Group Inc.
New York. 212.585.3939
www.artcapitalgroup.com