stevio
Member of DD Central
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Post by stevio on Sept 10, 2015 18:34:19 GMT
Just seen FS slipped in a sneaky email about this.
Just wondered how people felt about art loans? Some of the art stuff can be fairly random and not sure on the market for them, a bit like this one and I don't really know how to judge whether to invest? How have previous art loans gone on this and other platforms?
Loan Ref: 1114679255 - Microscupltures 3rd loan
Information
Loan Amount: £75,000.00Interest Rate: 12.00 %
This is a standard 6 month loan secured against a collection of microsculptures.
The borrrower already has two loans with FundingSecure, which would take precedence in the event of a default.
Loan ID:1802029033 £300,000
Loan ID: 1997221622 £130,000
This loan takes the total LTV up to 15.5%
The loan is offering interest to investors of 12% pa.
The loan is secured against the complete collection, to be stored in our secure vault. At the request of the artist we will release individual pieces for exhibition and display purposes, during which time they will be fully insured, before being returned to our secure vault. The minimum number of pieces held by FundingSecure has increased to 24.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,927
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Post by ilmoro on Sept 10, 2015 20:48:07 GMT
Just seen FS slipped in a sneaky email about this. Just wondered how people felt about art loans? Some of the art stuff can be fairly random and not sure on the market for them, a bit like this one and I don't really know how to judge whether to invest? How have previous art loans gone on this and other platforms? FS track record aint great. At least 4 loans have defaulted, 2 failed to make full recovery (FS covered one in full due to an error, other 30% capital loss), one full recovery, the other is still outstanding but was a very low LTV so should achieve full recovery. Another loan is about to default. Most of the others have rolled so too soon to judge. Thats said this ones probably about the safest given the prominence of the artist, uniqueness of the work and low LTV - 3rd ranked though so Ill probably give at a miss (or small punt) as Im in the first already. Not sure about other art loans elsewhere. MT has a few but none have come to the crunch point yet
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mikes1531
Member of DD Central
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Post by mikes1531 on Sept 10, 2015 21:00:46 GMT
Just seen FS slipped in a sneaky email about this. Just wondered how people felt about art loans? Some of the art stuff can be fairly random and not sure on the market for them, a bit like this one and I don't really know how to judge whether to invest? How have previous art loans gone on this and other platforms? : Why do you consider FS's email to be "sneaky"? Art or memorabilia valuations are rather subjective, and what's popular and in demand today could be unpopular and out of fashion when the loan is due for repayment in six months' time. With artwork -- or any unique security, for that matter -- selling is a matter of finding the right buyer at the right time, so any disposal is likely to be either slow or at a large discount. FS have had problems with some art and memorabilia loans that defaulted where it has been difficult to sell the security for anything approaching the valuation. So I treat such loans with a lot more caution these days, and steer clear of anything without a very low LTV. With respect to this specific opportunity, I have parts of the two previous FS loans against this collection, so I'll probably not invest as much as I normally would have done with a loan of this level of LTV.
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Post by profunder on Sept 11, 2015 0:20:58 GMT
This loan is not for me, its the first loan I am declining to bid on for a while.
There are a few key reasons in my decision.
(1) Its ranked behind the other loans on the same art. In under 1 month the primary loan of £300,000 is due to repayment. I suspect this will roll-over based on the fact if there was the money to repay it saved up, I see no reason for this new loan. If I lend money therefore I would much rather be in the rollover at the same interest rate (12%) than ranked behind it. Just common sense!
(2) The artist is still making more of these artworks. They take around 8 weeks each to produce, so thats another 6 per year. If the market value is £100,000 per piece the artist should be earning £600,000 per year. I struggle to believe this and therefore doubt the value.
(3) It is unclear if these pieces belong to the artist himself, given the value and lack of sale history I suspect so. Why would the artist need this money with such a high income? Of course if they are owned by a third party this would be irrelevant.
(4) I just think there are loans at 12% that I understand the risks and security better.
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