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Art-backed loans: a market of 34 to 40 billion dollars, more defaults at non-bank lenders and Sotheby's 900 million dollar bond

Deloitte and ArtTactic put art-secured lending at 33.9 to 40 billion dollars in 2025. Half of non-bank lenders reported defaults in 2024, and in January 2026 Sotheby's sold 900 million dollars of notes backed by art loans. How the market works and where the risk sits.

In January 2026 Sotheby's sold 900 million dollars of notes backed by loans it had made to collectors against their art. The deal, Sotheby's ArtFi Master Trust Series 2026-1, was "significantly oversubscribed", the auction house told The Art Newspaper in July. For the first time the pool also included loans secured by collectible cars.

The size grew on the way. On 22 January Asset Securitization Report described the deal at 600 million dollars, with provisional ratings from Morningstar DBRS running from AAA on the senior notes to BB on the most junior class, a two-year revolving period and final maturity by 20 June 2033. Sotheby's first deal of this kind, 500 million dollars in April 2024, had effectively created the asset class.

Behind the bonds is a lending market that keeps growing while auction sales wobble. The Art & Finance Report 2025 by Deloitte Private and ArtTactic, the ninth edition, published in November 2025, estimates outstanding art-secured loans at 33.9 to 40 billion dollars in 2025, nearly 12% above the previous estimate, ARTnews reported on 6 January 2026. Deloitte's figure for 2023 was 29 to 34 billion, and five years before that 20.3 to 23.6 billion, according to Bloomberg.

Why borrow instead of selling? Selling in a soft market means accepting a lower price and, in many countries, paying tax on the gain. A loan avoids both. The owner keeps the painting, usually on the wall, and gets cash for a tax bill, a capital call or another purchase.

The terms are not generous. Bank of America, which says it holds more than 30% of the market, typically lends up to 50% of the value, wants a collection worth about 10 million dollars and loans of 5 million or more, and charges a floating rate based on SOFR plus a spread, for one to three years, Bloomberg reported in August 2024. Citigroup estimated its own share at 10% to 15%.

Then there is credit risk, and it is split. Half of non-bank art lenders reported at least one default in 2024, up from 17% two years earlier, according to the Deloitte and ArtTactic report cited by ARTnews. Private banks reported none. Banks lend to clients whose other assets they also manage and can restructure. Specialist lenders and auction houses lend against the object, and when prices fall the object is what they get back.

Christie's runs its own financing desk, launched about five years ago, and lends against art, cars, handbags, watches and, more and more, wine, according to The Art Newspaper. The auction houses have an edge banks lack: if a loan goes bad, they can sell the collateral in their own salerooms.

The opposite approach is buying without debt. In Unicorn Art Club, members commit capital to a single artist and the club buys one work through a dedicated vehicle, with an exit planned in three to seven years. The guide linked among the sources sets out the costs and the steps.

Investing involves the risk of losing capital.

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