Q. My stocks have decreased in value and I am in debt. I have an art collection that is worth about $10million. How do I leverage it to get a loan and pay off some of my debt?

HL: You are not alone. A lot less people today have the abundance of credit and liquidity in the global capital markets than they had in the past 5 years or so. Plus interest rates are rising.  The major correction in the market has made selling art difficult so art owners are looking for other ways to monetize it. As a result banks are experiencing an increase in demand for art loans from people who have built up the value of their art collections.

Taking out a loan on your art and using it as collateral is much easier today with many more companies offering loan services. Lenders are more comfortable with the idea and the market will just get bigger. It happened in real estate where people did 100% refinancing and we will probably see it in art too.

One institution that offers art loans is Citibank. They have been in art-lending business since 1979, and its loans are secured against art and tend to be long term, often for upwards of 7 years. The service if offered only to clients who have a new worth of at least $50m and whose art assets count as just a fraction of their overall financial strategy. The minimum value of the collection must be at least $10m and the loans are typically about 50% of the assessed value. The banks art advisory service uses in-house appraisers and allows borrowers to maintain their collections at home. Contact your financial advisor to recommend a bank that will best suit your needs.