Truth be told, most of us walk into art galleries never expecting to afford to purchase any of the artworks on display. We use commercial galleries, especially the big ones, as museum entertainment, and leave the dream of collecting art to the wealthy 1%. But how might that change if one could purchase artwork after paying just 10% of its price and pay the rest in installments? A new startup gives aspiring collectors a chance to do just that.
Art Money is an app that offers a loan to buy artworks valued between $1,000-$50,000 in 10 interest-free monthly installments after paying a 10% advance. For example, if you encounter a $3,000 artwork that you’re dying to have but can’t afford to pay the entire sum at once, you can take it home for a mere $300 and pay the rest in $270 installments over the next 10 months. Anyone with a clear credit history and an annual income of at least $30,000 from all sources, including other investments, can be approved for the loan. When the sale is made, galleries get the full sum at once minus a 10% fee.
“The art market is broken and inefficient,” Art Money’s founder, Paul Becker, told Hyperallergic in a phone interview. “People want to engage further with art but there are too many things stopping them from doing that … It’s simply too hard for people to buy art,” he said.
Becker, an Australian art entrepreneur, started Art Money in 2015 in Sydney, Australia, in partnership with 26 local galleries. The app has since expanded to New Zealand and the United States and it currently works with a total of 1,000 galleries. About 600 of the participating galleries are located in the US.
The art market is “not a welcoming environment” for new collectors, Becker said. It focuses on big collectors and makes it hard for all the rest to even know where to start. “There’s a pent up demand from creatively interested people who are interested in design and architecture, but they have never come to contemporary art because the contemporary art world pushes people away,” he said. “Finance is not the only part of the solution, but it’s a big part.”
Art Money reports selling 4,000 artworks totaling $18 million in sales during its four years of activity. A third of the app’s 3,000 clients have returned for a second purchase after completing their first payment plan.
The app performs in a way similar to a recent program launched by the Flemish government, which offers an interest-free loan of up to €7,000 (~$8,000) to purchase contemporary art from Flemish and Brussels-based artists. Similar government-funded initiatives exist in the Netherlands and the UK, where they have been reported to boost the art sales of participating galleries.
Is Art Money effecting the sales of New York galleries? Jared Linge, the founder of High Noon Gallery in New York’s Lower East Side, told Hyperallergic that his gallery has doubled its sales since it started using the app two years ago. “Any gallery can give you a payment plan, but you’ll have to complete all the payments before getting the piece. Here you get it right away,” he said. The 10% fee that the app collects from galleries, is equal to a discount he usually offers to clients in regular sales, he said. Many of his new buyers, said Linge, are millennials who are interested in the works of the gallery’s roster of emerging and mid-career women artists.
But not all of the other galleries working with Art Money share High Noon’s success story. Several Chelsea galleries listed on the site told Hyperallergic the app had a negligible impact on their sales. Jim Kempner Fine Art, Foley Gallery, and Kim Foster Gallery reported no sales through the app. GR Gallery’s curator Francisco Scipioni said that only one client has shown interest, but he quickly backtracked and paid the full sum in advance. Ethan Cohen Gallery said it made a few sales on the app for “substantial amounts,” but refused to disclose any further information. All the galleries that spoke with Hyperallergic said the app did not introduce them with new collectors.
“I think it’s a very exceptional idea, but getting people to use it is a whole different story,” Kim Foster told Hyperallergic in a phone conversation. For some big-wig clients, she said, the very notion of a payment plan is offensive. In one case, a client was so offended by the offer that he ended up purchasing an additional piece “just to prove that he has money.” Following several such cases, Foster stopped promoting her gallery on the app. “I find it awkward to offer it to people … The app is great for galleries, I just don’t know to get it out there without being rude,” she said.
“The main reason some galleries are more successful than others [in selling through the app] is how they talk about it,” Becker explained to Hyperallergic. “The most successful galleries are comfortable talking about it,” he said, “other galleries are waiting for the collectors to ask.”
High Noon gallery appears to be a case in point. Unlike his peers in Chelsea, Linge includes a breakdown of the monthly payments near each item on his gallery’s price lists. That removes a major psychological barrier against buying art, he claims: “Americans are afraid of the word ‘loan’ because of its association with student loans and intractable debts.” Instead of “loan,” Linge promotes the service as a “credit system,” which seems to help ease the resistance. He also follows Becker’s advice and engages personally with gallery visitors to introduce them to the app.
“Anything new takes time to adopt, particularly in the art market which is particularly conservative,” Becker said. Art Money, he adds, is “culture-changing the art market” to pave the way to the “next generation of art collectors.” This diverse and fiscally responsible new breed of collectors, he said, is “less extravagant, less self-indulgent and more responsible” than the old guard.