Expertise

Lending & Finance

Many may not realize this, but fine art and other non-traditional assets with well documented and proven appraisal value can be used as collateral for loans and other financial products. During periods of market volatility, it is important to consider all financial avenues when managing personal and/or business assets.

With the recent growth of the art market, unfortunately, art speculation has become increasingly common and has developed its own market. Simply averaging valuations is never an appropriate solution as it usually results in a speculative valuation that is not founded in economic reality given the inherent uniqueness to every individual piece of fine art and it’s documentation (or lack thereof). Due diligence is imperative and the process is much different than valuation of liquid assets.

Having an art collection appraised so that it can be used as collateral for loans is beneficial when wanting to liquidate assets and leverage cash flow. To do this, fine art owners and institutions need to work with accredited appraisers to evaluate and document the myriad components of a piece.

Traditionally, a fair market value, self-contained appraisal would be sufficient. However, documented provenance, art market trends, condition, art market performance for genre/period, media, time period and fractionalized ownership all affect the valuation of a piece – and all could be potential exposure for your institution and/or family. Data from a variety of markets, including timely, well publicized auctions and quick sale, are important for a lending institution that may not be familiar with these non-traditional lending avenues.

Uniform Standards of Professional Appraisal Practice (USPAP) compliant personal property appraisals are required paperwork for specialized loans. The Ruffner Art Advisory has significant experience, expertise and knowledge in the valuation of art and understanding what financial institutions need when using fine art and other non-traditional assets as collateral. We are regularly contracted by Homeland Security to research looted art and artifacts seized by The U.S. Border Patrol which has resulted in preparing the aforementioned appraisals to stand up in court for prosecuting criminals. We pride ourselves on providing world-class service to our clients and know that each situation is unique.

In-person inspections of art are preferred, however, we can conduct these inspections remotely through the use of the internet and high-quality photography.