Acquisition loans are used by collectors and art-world professionals to assist in purchasing items either privately or at auction. They operate in a similar way to home mortgage loans insofar as the buyer need only have a percentage of the purchase price in readily available funds and the acquisition loan provider will provide the shortfall. Apollo Collector Services can help:
- dealers and galleries that traditionally resort to co-buyers or ‘backers’ to help fund purchases
- private collectors who may not have all the funds required when an acquisition arises
- facilitating auction purchases by pre-agreeing an upper limit on the hammer price
Case StudyA large gallery was able to acquire a significant Soulages at auction for £3.1m despite having only £1.5m in available funds.
The acquisition loan provider provided the £1.6m shortfall by way of a pre-agreed acquisition facility at an 8 per cent per annum interest rate, and the painting itself was used as the only security on the loan. The painting was sold 18 months later for £4.5m and after the loan provider was repaid with interest, all the remaining profit was retained by the gallery.