Chloe Kilburn, who leads fine art at Luxury Asset Capital and heads its New York office, helps collectors turn valuable artwork into collateral for loans without having to sell their collections. The business provides confidential non-bank loans by using luxury assets as collateral.
Fine art collections are cultural assets to be displayed and appreciated. They can also be collateral. As the art market continues to become intertwined with global finance, art-backed loans offer collectors another way to raise money.
“The term luxury itself can encompass different types of items, anything from jewelry, watches, gold coins, gold bars, and luxury handbags,” Kilburn tells Observer.
“We are also open to other kinds of collateral. As long as we can see that there is a strong secondary market for it, we can sometimes get creative.” She reveals that in the past she’s done loans on memorabilia like Prince guitars and Super Bowl rings.
How Kilburn values the collateral
All the evaluations are conducted in-house by experts such as Kilburn and her colleague. The process starts when the client provides images of the work and catalog details. Together, the team reviews auction data using Artnet or MutualArt databases to get concrete information about the artwork’s date, medium, and size.
“It also becomes a question of using your own eye because composition is very important when evaluating a piece of artwork,” she says. Having studied art history, grown up in an artistic family and worked in collection management, Kilburn brings that experience to evaluating luxury assets.
Kilburn says the loan-to-value ratio generally falls around 40 to 50 percent of the work’s hammer price. The business calculates its offer after accounting for the buyer’s premium included in the published auction results. Prestige is only one part of the equation. The marketability of the artwork matters just as much.
The 2025 Deloitte Private and ArtTactic Art & Finance Report projected outstanding art- and collectibles-secured loans of $33.9 billion to $40 billion by the end of 2025. Sotheby’s Financial Services says it has originated more than $12 billion in art-backed loans over its history. For collectors, art-secured lending can provide liquidity without a sale, although borrowing comes with interest costs and the risk of losing the pledged work.
“The majority of our clients are collectors or dealers who want to leverage their existing collection to fill their collection up,” says Kilburn. This is why speed and efficiency are central to the company’s pitch.
“What sets us apart from the more traditional lending avenues is that we’re very quick and pride ourselves on being discreet,” she adds.
The cost of borrowing against art
Luxury Asset Capital publishes average interest rates of 2 to 4 percent per month, depending on the asset, amount and term. An individual art-loan offer may differ.
Once the loan is approved, the artwork doesn’t stay on the client’s walls. “We’re a non-recourse lender,” Kilburn says. “How we have security in the loan is by having physical possession of the collateral.”
The company coordinates with professional art handlers to collect the work, inspect the condition, and transport it to secure storage facilities such as UOVO and Crozier.
Like any other lending avenue, art-backed loans still carry risk. According to Kilburn, Luxury Asset Capital is designed for short-term borrowing, but some loans can remain outstanding for years. For example, an artist who was popular a decade ago might have lost value by the time the borrower is ready to repay.
“When we’re doing our valuation, we are always thinking to the future if we have to end up foreclosed on it, which rarely happens,” she says. “We have a super low default rate, but that’s kind of the reality of the risk that we’re evaluating when we do our valuations.”
This uncertainty has shaped how the company makes its decisions. Kilburn says the company has tightened its guidelines for works whose markets have weakened and sometimes offers a lower loan-to-value ratio or declines to lend against them altogether.
Kilburn’s outlined approach illustrates that borrowing against art is not just about what the artwork is worth today. It’s about what it might be worth when it’s time to repay.
