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The lending firm, called Fine Art Financial Services (FAFS), will be launched to help art collectors and dealers borrow against their assets.

FAFS are funding the lending and offer up to 50% of the value of the assets on single or groups of works up to $20m.

Loans will be available from three months to three years for works in all major auction categories, as well as high value jewellery.

A range of products will include lending against an item that is due to be auctioned. FAFS will take possession of the work and arrange for transport to one of its storage facilities in London, Geneva, New York, Hong Kong or Singapore.

The Fine Art Group claim their lending company is different to others in the market because of the expertise of their team and their independence from the large auction houses.

Philip Hoffman, who founded the company in 2001, spent 12 years at Christie’s where he was finance director and later the deputy chief executive of Europe. Colleague Guy Jennings worked in senior management at both Christie’s and Sotheby’s.

Last year the company hired Freya Stewart as head of art lending to manage this new company. She was previously senior legal counsel at Christie’s.

The Fine Art Group now have three business divisions, adding finance to an art advisory business and their investment arm which has so far launched seven art-related investment funds.

Significant Long Term Business

Compared to the US, the UK lending market for luxury assets such as art is small. The law currently favours the lender rather than borrower, meaning owners cannot keep the art on their walls if they borrow against it.

In the US, the Uniform Commercial Code law allows some borrowers to keep the assets while borrowing against part of their value. This law has helped the art lending market grow to around £6bn in the States.

Stewart said: “We see this as a significant long term business for us. Our strength has always been combining market leading in-house art and finance expertise.

“With the demand from clients and the wider market for art loans that we have seen, this business makes sense for both us and our clients.”