Mobile phone companies like Sprint and T-Mobile are valued at tens of billions of dollars by investors, who know companies have millions of consumers who contractually agree to pay companies a constant amount of money. each month. Art dealers, on the other hand, have a small consumer base, and those consumers are not known to adhere to quick payment schedules.
Cash flows in the art sector are irregular, which theoretically would make dealers an ideal target for the growing art finance industry, through which art owners can borrow money for cash. works of value. This money could be used to pay bills during fallow periods, finance a timely acquisition, or expand and develop the dealer’s business. But a report released Friday by The European Fine Art Fair (TEFAF) on art funding found that dealers make up less than 10% of the estimated $ 20 billion guaranteed loan industry.
The report, prepared by Anders Petterson, founder and CEO of ArtTactic, a London-based artistic research consultancy, interviewed 142 dealers who attend TEFAF art fairs (its spring edition in New York opens Thursday). TEFAF fairs are known for their tight control and attract some of the most prestigious and established dealers in the world, so the results are unlikely to be generalizable to the entire art market, which includes many. many small emerging contemporary art galleries. But the report found that more than a quarter of dealers said lack of access to credit hampered growth, suggesting unmet demand for finance. Here are five takeaways from the report.