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Art and Cultural Property: What Secured Lenders Need To Know

With a bustling art trade reaching, in many sectors, higher and higher auction prices, an increasing number of lenders are making art-secured loans. What was once a niche practice within nance is becoming more commonplace. However, art-secured loans present unique issues and risks, including authenticity, attribution, valuation, regulation of certain types of materials (i.e., ivory and other materials from endangered species), and questions of title (i.e., stolen art, Nazi-conscated art, and illicitly excavated or exported objects). The international nature of many art transactions can even make perfecting a lender’s security interest in art collateral challenging. Art-secured transactions often require specialized due diligence and procedures. This article o€ers lenders a brief introduction to the issues involved in art-secured loans and advises them on how best to protect their investment.

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