FAQ: ARTIANA Fine Art Finance

What is ARTIANA Fine Art Finance?

Artiana Fine Art Finance is our art finance advisory division. Leveraging upon the strength of our auction house platform, we specialize in financing solutions that cater to both – buyers in our auctions as well as others who can borrow against blue-chip Indian art works.

What services does ARTIANA Fine Art Finance provide?

We provide finance solutions to consignors and buyers at our auctions, and arrange advances secured against Indian fine art at competitive interest rates. Our bespoke finance solutions provide financing for fresh acquisitions or existing collections.

Why finance or borrow against art?

By financing their purchases at Artiana auctions, clients can take advantage of opportunity buys and schedule a delayed or installment payment on their acquisitions based on their cash flows. By leveraging existing artworks, our clients optimize the use and enjoyment of their collection, while unlocking equity and allowing further portfolio diversification.

What type of art does ARTIANA Fine Art Finance accept as collateral?

We will consider individual artworks and collections of blue-chip Indian fine art as collateral. Artworks must be freely marketable and produced by prominent artists with an existing track record in the secondary market.

What is the artwork evaluation process?

We are an auction house, and offer advisory services on a highly confidential basis to evaluate artworks. The individual artwork or collection will be estimated by us as if they are being proposed for auction, and the advance against these item/s will typically be 50% of the lower estimate value offered by us. We will also require an independent inspection by a conservator.

What Loan-To-Value (LTV) does ARTIANA Fine Art Finance offer against the artworks?

We will typically advance up to 80% of the lower estimate value of artworks purchased at our auctions or up to 60% of the appraised value of the proposed external art collateral.

What are the advance sizes that ARTIANA Fine Art Finance offer?

We arrange advances starting at USD 50,000 and can assist in securing advances of substantially larger amounts.

How long does the disbursal take?

The approval depends on the location of the artworks and the clients’ art ownership structure. However, our domain expertise and large, liquid balance sheets of our financiers allows us to complete the process more quickly than traditional operators.

Do our clients’ retain possession of their art?

No, we require that the artwork be held as collateral in our art storage facility till the advance has been fully paid back to our financier.

Will the artworks be insured during the term they are held as collateral in storage?

Throughout the term that the artworks are held as collateral they will be insured at double of the advance amount, to cover the full value of the art asset. The policy will be assigned to us for distributing the amounts as stipulated, between the client and financier. The insurance covers the items right from the time of collection, during storage until the final handover.

Who owns the artworks during the term they are held as collateral in storage?

The artworks remain the clients property during the entire storage period.

What are the advantages of Artiana’s fine art finance compared to a traditional bank loan?

Our advances offer flexibility and a variable tenors upto 24 months with a no-charge early exit option. Unlocking equity and receiving liquidity without cumbersome documentation and credit approval process. There is no personal liability, the collateralized artworks are the sole guarantee towards the advance (non recourse).

What are the early exit options before expiry of the agreed tenor?

Clients can request an early exit before the expiry of the agreed tenor by giving a 30 days notice without any exit charges being payable. Any advance service charges collected in such cases will be non-refundable. For exercising in rare and unlikely situations, we reserve the right of an early exit option on behalf of our financiers by giving a 90 days notice to the client.

What are the charges and costs for the service and advance?

Artiana Fine Art Finance will charge an arrangement fee of 2% of the advance amounts arranged against external art assets, this fee is waived for finance arranged against purchases made in our auctions. Depending on the value, tenor and terms of the advance the charges are calculated at typically 15 % p.a., payable quarterly in advance for fixed maturity payments, and at a flat rate of 10 % p.a. for monthly installment payments. The charges are set at the start of the facility and fixed for the entire tenor. There are no additional costs for evaluation and storage, insurance cover is procured for double the advance amount to typically cover the full value of the asset and billed at actuals to the client.

 

Why ARTIANA Fine Art Finance Service is Perfect for Collectors of Indian Art

Published on September 18, 2018 (widewalls.ch), by Angie Kordic

The online auction house ARTIANA, a well-known platform based in Dubai, will now expand its activities and offer a one-of-a-kind service on the market right now – their Fine Art Finance service.

Announced just ahead of their November 2018 sale of South Asian art, it is an art finance advisory division that will specialize in financing solution to both buyers in their auctions and those who can borrow against blue-chip Indian artworks. By financing their purchases at Artiana auctions, clients can take advantage of opportunity buys and schedule a delayed or installment payment on their acquisitions based on their cash flows. By leveraging existing artworks, our clients optimize the use and enjoyment of their collection, while unlocking equity and allowing further portfolio diversification.

We talk to ARTIANA’s founder Lavesh Jagasia about the importance of such service being available within the field of Indian art and its market, as well as what it could mean for all sides of the sales.

The ARTIANA Fine Art Finance

Widewalls: What brought the creation of the ARTIANA Fine Art Finance on? How did it come to be?

Lavesh Jagasia: ARTIANA Fine Art Finance will assist us in increasing our clients and broadening the collector base of Indian art. Being a part of the Indian art sphere for the last 3 decades, I have experienced the effects that lack of liquidity has on this market just as it does on any other asset class. There are many times that works are sold in auctions for attractive prices, and end buyers are unable to take advantage of these situations as they would have not planned such purchases. With other collectors already holding significant portions of their net-worth in Indian art and unable to sell it quickly or leverage it when required, it limits their investments in this sphere due to the illiquid nature of this asset class.

By introducing our FlexiPay ‘Bid Now Pay Later’ facility in our auctions and offering bespoke finance solutions for blue-chip Indian art, we will address these issues resulting in deeper penetration of the market.

Widewalls: How does the service you’d be providing differ between the buyers and those who borrow against blue-chip Indian artworks?

LJ: The buyers on the ARTIANA auction platform have multiple benefits as compared to those offering external art assets as collateral. All items offered in our auctions are eligible for deferred or installment payments under our FlexiPay ‘Bid Now Pay Later’ scheme as long as the clients have been pre-approved for this facility. ARTIANA buyers have access to a higher Loan-To-Value (LTV) ratio of up to 80% of our lower estimate value as compared with up to 60% of our appraised value of all external art assets. The arrangement fee of 2% of the advance amount is also waived from them.

Charges for evaluation, storage and the conservator’s inspection report are currently complimentary for all clients, but maybe applicable to external clients in the future.

Widewalls: What is the process like for those who wish to approach ARTIANA in order to use this service? What can they expect and what is expected of them?

LJ: For prospective bidders in our auctions, the process is quite simple. All they need to do is select between the deferred or installment payments offered in our ‘Bid Now Pay Later’ plans, agree to the Terms and Conditions thereof and get a pre-approval prior to the commencement of the auction, confirming their eligibility for this facility. If their bids are successful, then they can then choose to either pay as usual or opt for their pre-approved FlexiPay facility.

The clients who want to propose external art assets as collateral, will have to first send us the image and details of the artworks. After our preliminary requirements of the artwork, such as artist and ownership are met, then an appraisal and condition check will be carried out, subsequent to which, the evaluation, LTV and terms are discussed with them ahead of the next steps.

In both cases, the artworks are stored in our art storage facility till all amounts due against them are cleared.

Making an Impact on the Indian Art Market

Widewalls: Why Indian art? Is it exclusively Indian art?

LJ: Yes, currently we are offering this facility only on blue-chip Indian artworks. This is a market that we have in-depth knowledge of, and is our core area of focus even in our auctions. Our expertise in this domain enables us to effectively manage the risks, and have quick turnaround times in structuring bespoke solutions for our clients.

Widewalls: The ARTIANA Fine Art Finance is the first service/product of its kind out there. What are the advantages you offer, as a company already in the bespoke business, compared to other sources of financing?

LJ: That is correct, currently there is no service/product available that offers specialized financing solutions for Indian art. Our advances offer flexibility and a variable term. Unlocking equity and receiving liquidity without cumbersome documentation and credit approval process. There is no personal liability, the collateralized artworks are the sole guarantee towards the advance (non-recourse).

Widewalls: How do you see this service having an impact on the art market and the way business is being done in sales?

LJ: The availability of flexible payments in our auctions will allow buyers to make purchases and plan their payments, no longer having to wait till the entire amount is available before placing a bid or making an opportunity purchase when a work is going for an attractive price at auction.

With the clients who will use this service for external art assets, they could use this facility to unlock equity and diversify their collection, for short-term funding and bridge finance to acquire works while awaiting sale transactions on their existing ones.

The availability of liquidity against only certain blue-chip artworks will also segregate the market identifying investment-grade art from the rest.

All of this will positively impact the Indian art market and increase overall sales of the artworks that qualify for this service.

Dubai-based auction platform will now provide loan against blue-chip Indian art work

Published on September 16, 2018 (moneycontrol.com), by Tasmayee Laha Roy

Artiana will consider individual artworks and collections of blue chip Indian fine art as collateral. Artworks must be freely marketable and produced by prominent artists with an existing track record in the secondary market.

All the exquisite Indian art work that adorns your walls can now get you a loan.

Dubai-based online art auction platform, Artiana has started a one-of-its-kind service -Artiana Fine Art Finance. Leveraging upon the strength of the auction house platform, Artiana is all set to provide financing solutions that cater to both buyers in auctions as well as others who can borrow against blue-chip Indian artworks.

While there are platforms like Levart, Sotheby’s Financial Services and others that provide loan against artwork what is special about Artiana is their services are dedicated towards blue-chip Indian artwork.

Clients having artwork that qualifies as collateral for this facility and can arrange the physical delivery of these pieces to Artiana’s storage facility in Dubai, can use this service. Interestingly, the equity released against the artwork can be used for any purpose and there are no restrictions on the deployment of these funds.

What exactly does Artiana Fine Art Service do? They provide finance solutions to consignors and buyers at our auctions and arrange advances secured against Indian fine art at competitive interest rates. “Our bespoke finance solutions provide financing for fresh acquisitions or existing collections,” said Lavesh Jagasia, Founder of Artiana.

Art work has been an investment option for a lot of people for years now but unlike other commodities like gold or real estate art is not easy to sell. At least not as quickly as other investment options. This is the gap Artiana wants to bridge.

“There are times that works are sold in auctions for attractive prices, and end buyers are unable to take advantage of these situations as they would have not planned such purchases. With other collectors already holding significant portions of their net-worth in Indian art, and unable to sell it quickly or leverage it when required limiting their investments in this sphere due to the illiquid nature of this asset class,” Jagasia said.

With bespoke finance solutions for blue-chip Indian art, Artiana wants to address these in the art market.

As for the amount of finance provided, while there is no upper limit the minimum advance size is $50,000 which could be against one work or a collection of works.

But what Loan-To-Value (LTV) does Artiana Fine Art Finance offer against the artworks? “We will typically advance up to 80 percent of the lower estimate value of artworks purchased at our auctions or up to 60 percent of the appraised value of the proposed external art collateral,” Jagasia said.

Explaining why the company came up with financial solutions against blue-chip Indian artwork only, Jagasia said, “We currently focus on Indian art in our auctions, hence to be able to accurately estimate and guide our clients and financiers we prefer to stay within this domain. Secondly, there is no other such product/service available for Indian art making the facility a welcome addition to the Indian art sphere having a pent-up demand.”

As for the kind of artwork that can be used for availing the service, Artiana will consider individual artworks and collections of blue-chip Indian fine art as collateral. Artworks must be freely marketable and produced by prominent artists with an existing track record in the secondary market.

The artworks are evaluated by both Artiana and also independently inspected by a conservator.

For securing the transactions throughout the term that the artworks are held as collateral they will be insured at double of the advance amount, to cover the full value of the art asset. The insurance covers the items right from the time of collection, during storage until the final handover.

As for Artiana’s interest in the lending process, Artiana Fine Art Finance will charge an arrangement fee of 2 percent of the advance amounts arranged against external art assets, this fee is waived for finance arranged against purchases made in their auctions. Depending on the value, tenor and terms of the advance the charges are calculated at typically 15 percent per annum payable quarterly in advance for fixed maturity payments, and at a flat rate of 10 percent per annum for monthly installment payments.

 

ARTIANA – Highlights – Lot 41 – Classical, Modern and Contemporary South Asian Art – Online Auction – No Buyer’s Premium

Maqbool Fida Husain – ‘Islam’ – 1992 – acrylic on canvas – 78 x 139 in. – Lot 41

ARTIANA’s upcoming online auction of Classical, Modern and Contemporary South Asian Art on March 23-27, 2017 highlights this distinct work of Maqbool Fida Husain. This painting is the most valuable lot in the upcoming sale, both in terms of price and history behind the artwork. 

‘Theorama’ is a ten panel series that was influenced by Husain’s past preoccupations with theosophy and his experiences as a billboard painter. Composed in the early 90s, Theorama tributes ten different faiths — highlighting what Husain sees as the finer aspects in each; these are strung together in the series to symbolise a sense of unity or a common thread. ‘Islam’ is Husain’s masterly depiction of the Muslim faith.

To the left is a Sufi saint with his finger of ‘Kalema e Shahadah’ raised. The black and majestic cube of Kaabah, inscribed with the Arabic ‘Kaaf’, is positioned at the heart of the image, emphasising its prominence in no uncertain terms. A circle beside the Kaabah represents the dome of the The Prophet’s mosque in Madinah and is inscribed with the alphabet ‘Meem’. ‘Al-buraq’, the lightning horse, gallops across the sky to the right while the ‘Al-Shaqqul Qamar’, the splitting moon — an Islamic symbol of the scientific temper — watches over. ‘Al-Loh-al-Mehfooz’, the book of Judgement Day, also sits prominently to the right.

This simple yet substantial homage to Islam is brought about through a keen use of colour and line. These, along with tasteful use of religious motifs and symbolism, assembled together with an intimacy and personal reverence, lends this painting the distinctness for which it is known.

Auction Catalogue-South Asian Art ‘Classical, Modern and Contemporary’-March 23-27, 2017