CHAPTER 1
INTRODUCTION
How do art dealers finance their day-to-day business activities What sources are
currently being used and what types of funding are available How do these businesses,
often with unpredictable sales patterns, sustain their financial health during the ups and
downs of the art market cycle These are aspects of the art business which are seldom
discussed, hence very little information or data currently exists on this topic.
Through interviews with 142 of the dealers and galleries participating in the TEFAF art
fairs, we have gained insights into this influential group of dealers and how they currently
manage their finances. Although, the sample is not necessarily representative of the
dealer and gallery population as a whole, particularly due to the stringent vetting and
selection criteria of the TEFAF art fairs - it does represent the category of dealer and
gallery that financial institutions and lending providers would potentially consider
‘acceptable’ risks for lending purposes.
The other aspect of the research, looks at gallery/dealer financing from a lender’s
perspective. In discussions and interviews with key finance providers (private banks,
commercial banks and asset-based lenders), this report also looks at some of the key
challenges that this industry faces when providing finance to the art dealer community,
and what can be done to address these frictions.
Throughout the report we have included opinions, thought-pieces and Q&As with experts
involved in the art lending and financing industry from provider, legal and financial
perspective.
We hope this new digital report will become a resource for galleries and dealers, to raise
awareness of what finance options are available and when they might be appropriate to
use. For the providers of finance, we believe the report will give some insight into how art
dealers are currently financing their activities, and articulating some of the challenges
COPYRIGHT2018 TEFAF
INTRODUCTION
that are stopping the market from reaching its full potential.
As much as we have tried to provide answers to some key questions and objectives for
this research, the findings also bring up a range of issues that remain unresolved. We
hope others might be encouraged by the findings and the challenges, and help the
industry work towards new finance solutions, products and services - fit for the 21
century art gallery and dealer model.
st
I would like to thank all of the TEFAF galleries and dealers that participated in the survey,
as well as all the finance providers that we have been interviewing over the last two
months. Also, a big thank you to our expert contributors who added a new and different
dimension to the report findings by sharing their insight, knowledge and expertise.
I hope you find this an enjoyable read!
Anders Petterson
Founder and Managing Director, ArtTactic
COPYRIGHT2018 TEFAF
INTRODUCTION
CHAPTER 10
THE OPPORTUNITY
Is there a real need for dealer finance
Despite the low leverage among art dealers, 31% of the TEFAF dealers surveyed said that
they have a need for finance, and a further 18% said they didn’t know. This implies that
almost half of the dealer community sees or could see a potential need for a range of
different finance options in addition to their current method of financing their business
COPYRIGHT2018 TEFAF
THE OPPORTUNITY。