What you need to know about Art Based Loan (ABL)

Recently, VBank, Nigeria’s leading digital bank managed by VFD Microfinance Bank and ARTSPLIT, an art trading technology company, launched its new art-based loan offering. The innovative financing solution is intended to empower art collectors, galleries, and dealers by allowing them to access capital for a variety of purposes by leveraging the value of their artwork.

Below are all you need to know about the loan and how to access it.

An art-based loan is a loan that can be accessed using artwork as collateral.

It provides collectors/corporate bodies an opportunity to gain access with the right level of flexibility to a financial solution that works for their various needs.

Of course, ABL is accessible to anyone who possesses an investment grade/high-value artwork that can be put up as collateral.

This could be HNIs, Art collectors, corporate bodies, and gallery owners of high investment grade prestigious artworks, among others.

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Moreover, the artwork will be used as collateral in securing the loan, while the custodian of the artwork will be AAM (Anchoria Asset Management) till repayment is fully done.

For the artwork valuation, ARTSPLIT comes in and the artwork will be insured.

But the loan received will be in Naira, with VFD Bank, Anchoria Asset Management and ARTSPLIT as the parties to the loan transaction.

Individual users are eligible to receive up to N12 million, while corporate bodies can receive up to N60 million, with an interest rate of 34.5 percent per annum, inclusive of the custodian, underwriting, valuation, and insurance fees.

The value of the artwork must have a 200 percent cover for the loan amount requested.

As well, the loan tenure is up to a maximum of 1 year (subject to exceptional approval), while the artwork will be available for pickup within 24 hours after full repayment of the loan.

To clear the air on the genuineness of the works, the artworks are authenticated and evaluated by the ARTSPLIT curatorial board.

To access the loans simply download and sign up on the ARTSPLIT app, upload the artwork in your personal catalogue and await approval of the loan.

Send an email to [email protected] and copy [email protected] stating your intention to take a loan.