VBANK, ARTSPLIT boost art-based lending

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2 years ago

From left: Olaere Sarah Donmu, and Rotimi Awofisibe, both of ARTSPLIT, Managing Director, VBank, Gbenga Omolokun,Chairman, ARTSPLIT, Billy Osemwegie and Senior Wealth Advisor, Anchoria Asset Management, Esther Ugwuat the launch.

Leveraging artworks to access loans has received a boost with the partnership between the two organisations after years of clamour.

A new initiative has been launched to allow people access to loans with valuable artworks. This is coming after clamour by leading players in the visual arts sector that artworks should be used as collateral and that they don’t have to sell their precious collections to get loans.

The new Art Based Loan offering by VBank and ARTSPLIT, an art trading technology company, is primarily a boon for art collectors, galleries, and dealers. The innovative financing will empower them to access capital for several purposes by leveraging the value of their artwork.

While unveiling the initiative at a news briefing last Friday in Lekki, Lagos, the promoters explained that the Art Based Loans provide a unique opportunity for art enthusiasts and businesses to maximise the value of their art collections without selling valuable assets.With the product, borrowers can keep ownership of their artwork while obtaining a loan backed by its appraised value.

The quintet of Chief Financial Officer, ARTSPLIT Olaere Sarah Donmu, Executive Director Finance and Operations, ARTSPLIT Rotimi Awofisibe, Managing Director, VBank, Gbenga Omolokun, Chairman, ARTSPLIT Billy Osemwegie and Senior Wealth Advisor, Anchoria Asset Management, Esther Ugwu who jointly briefed arts journalists at the launch of the product, gave a detailed breakdown of how it will work.

VBank will offer the loan facility at 30 %pa with loan limits of N12 million and N60 million for individuals and corporates, respectively. ARTSPLIT will validate provenance, value the artwork and guarantee the loan at 3% fees, a custodian fee of 0.5% and an additional 1% insurance charge.

“We are thrilled to introduce our Art Based Loan offering, which bridges the gap between art and finance,” said Omolokun. “Our ground-breaking solution enables art collectors and businesses to maximise the value of their art assets while maintaining ownership and control. We are confident that with ARTSPLIT &AAM’s expertise and customised financing options, we can help our clients thrive in the dynamic art market,” he added.

Highlighting the product’s advantages, Osemwegie said it includes flexible financing as borrowers can obtain loans based on a percentage of the appraised value of their artwork, giving them the flexibility to access capital.

The others include tailored loan terms, meaning each loan is individually structured to meet the borrower’s unique needs and preserved ownership, allowing borrowers to retain ownership of their artwork throughout the loan.

There’s also diverse use of funds, which means loan proceeds can be used for various purposes, including acquiring new artwork, expanding art businesses, supporting exhibitions, and meeting short-term liquidity needs.

On eligibility for the Art Based Loan, the promoters said it is accessible to anyone with an investment grade/high-value artwork that can be used as collateral. This could be High Networth Individuals, art collectors, corporate bodies and gallery owners of high investment grade prestigious artworks.

They added that Anchoria Asset Management would be in the custody of the artwork until repayment, while ARTSPLIT would be handling the artwork valuation.

The artwork will be insured during the loan duration. At the same time, individual users are eligible to receive up to N12 million, while corporates can receive up to N60 million.

The loan tenure is up to a maximum of one year, and the artwork will be ready for collection 24 hours after full loan repayment.

Giving further details about ARTSPLIT, Osemwegie said it is an art trading technology company driven by one common goal; enhancing the investment status of African art by allowing users to co-own rare and valuable artworks on a platform that guarantees price discovery and market liquidity.

He said the ARTSPLIT mobile app allows art lovers to own fractions (also known as Splits) of prestigious African artworks, which they can trade in real-time. ARTSPLIT also provides opportunities for owners of investment-grade African art to list their works and have them evaluated.

The call for art-based lending has been on for a while, with players, including Prince Yemisi Shyllon and Oliver Enwonwu, among others, making a case for it previously.

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