Mobile phone companies like Sprint and T-Mobile are valued in tens of billions of dollars from investors, who know the companies have millions of consumers who commit via contract to paying the companies a steady amount of cash each month. Art dealers, by contrast, have a tiny consumer base, and those consumers are not known for adhering to prompt payment schedules.
Cash flow in the art business is irregular, which would theoretically make dealers a ripe target for the growing art financing sector, through which art owners can borrow cash against valuable works. That money could be used to pay bills during fallow periods, fund an opportune acquisition, or expand and grow the dealer’s business. But a report out Friday from The European Fine Art Fair (TEFAF) on art financing finds that dealers account for under 10% of the estimated $20 billion art-secured lending industry.
The report—prepared by Anders Petterson, founder and managing director of ArtTactic, a London-based art research consultancy—interviewed 142 dealers who participate in TEFAF art fairs (its New York spring edition opens Thursday). TEFAF’s fairs are known for their strict vetting and attract some of the most prestigious and established dealerships in the world, so the findings are likely not generalizable to the entire art market, which includes many small and emerging contemporary art galleries. But the report found that over one-fourth of dealers said a lack of access to credit had hampered growth, suggesting some unmet demand for financing. Here are five takeaways from the report.