Lamna Financial Sees Surge in Art-Secured Loans Through Fine Art

The trend of pawnbroking fine art is gaining significant traction in South Africa, reflecting global shifts as individuals explore innovative ways to unlock the value of their high-end assets. Lamna Financial, a leader in high-end pawnbroking services, has reported a substantial increase in art-secured loans, cementing art as a valuable and growing asset class in the financial landscape.

According to Charles Meyerowitz, CEO of Lamna Financial, "More clients are recognising that fine art can unlock substantial liquidity, similar to traditional high-value assets like vehicles or luxury watches. We’ve seen a growing demand for loans secured against art, with loan-to-value ratios ranging between 50-70%, depending on the quality, provenance, and market demand of the artwork."

Meyerowitz points out that many people view fine art as something to enjoy, but may not realise its potential as a financial asset. “Fine art is unique in that its value tends to appreciate over time. Pawnbroking against art allows collectors to access significant sums of money quickly without having to part with their pieces permanently,” he says.

Surge in Art-Secured Loans

Lamna Financial's High-End Pawnbroking Index (LHPI) has shown a 94% year-on-year increase in loan payouts, with a 61% rise in the number of deals completed over the same period. Art-secured loans alone have seen a 20% increase, a trend that is expected to continue as art financing awareness grows in South Africa.

"While vehicles, watches, and luxury goods remain popular choices for asset-backed loans, we are seeing a sharp rise in clients using their art collections for similar purposes," adds Meyerowitz.

Global Growth in Art-Secured Loans

Internationally, the art market is experiencing strong growth in the use of art as collateral for loans. According to reports, the global market for art-secured loans is expected to exceed $20 billion by 2025, with financial institutions and boutique lenders offering specialised art financing solutions.

Auction houses such as Sotheby’s and Christie’s have developed art-backed lending programs, further normalising the practice. The Citi Global Wealth Management 2023 Art Report highlights a 15% year-on-year growth in art-backed lending, driven by both rising art values and the demand for flexible financing options. Consultancy firm Deloitte also reports a 119% increase in lending by auction houses and boutique lenders over the past five years, compared to a 31% rise at banks.

Art Loans in South Africa

While art pawnbroking is relatively new in South Africa, the country’s growing fine art market and economic fluctuations make this a viable option for collectors. "Art loans are particularly valuable because art is so unique," Meyerowitz explains. "Unlike a car or watch, you can’t simply sell and buy back the same piece. This makes art an ideal, highly unique asset class—especially for high-end works."

Meyerowitz notes that blue-chip art retains its value over time, making it a solid choice for those looking to unlock quick cash. Lamna Financial has secured loans against works by prominent artists such as Vladimir Tretchikoff, Alexis Preller, William Kentridge, and Robert Hodgins.

Why Clients Leverage Art for Loans

Many clients choose to secure loans against their art for various reasons, from investing in new business ventures to managing cash flow or financing personal projects.

How Does Pawnbroking Work Against Artwork?

Much like other assets such as luxury watches or jewellery, fine art is appraised based on market value, authenticity, and condition. Once appraised, the piece is held as collateral while the owner receives a loan. The artwork remains secure with the lender until the loan is repaid, at which point it is returned to the owner.

"Our expert evaluators assist clients in unlocking the value of their art collections," says Meyerowitz. "With a deep understanding of the art market and fair loan terms, we’ve become a trusted partner for those looking to leverage their fine art for financial flexibility."

For more information on securing a loan against fine art, visit www.lamna.co.za.

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Strong Growth in Pawnbroking Against Art in South Africa

Lamna Financial sees a surge in art-secured loans as South Africa follows global trends. Discover how fine art can unlock liquidity without selling your prized pieces!

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