A well-placed loan opens dialogue with institutions and experts, enhances the reputation of the work and the broader collection and reaches new audiences.
The loan may also produce an income by means of a lending fee and/or royalties and save the lender the costs of insuring, transporting and conserving the work while on loan.
Despite the obvious appeal of lending, collectors face significant risks in lending works, particularly overseas.
Some key points to bear in mind are:
► Ensure that you fully document the terms of any loan and specify how and where any disputes will be resolved.
► Obtain full and comprehensive ‘nail to nail’ insurance covering the object from the moment it is taken off your wall to the moment it is returned.
► If you are loaning to a public institution in the UK and seeking cover under the Government Indemnity Scheme (GIS), be aware of the mandatory provisions that need to be included in documentation.
► Before the artwork goes out on loan, have a conservator assess its condition (usually at the borrower’s expense) and ensure that the condition is re-assessed by the same conservator on the return of the artwork.
► Set out the environmental and display conditions that the work requires and any security specifications.
► Agree how the work is going to be transported and hung or installed and by whom.
► Consider whether the work is protected by copyright. Specify whether the borrower is permitted to take photographs and what restrictions apply and who will retain copyright.
► Agree the credit line to be used in all publications of the work and on any label.
► When loaning abroad, be prepared to comply with any customs formalities to allow the work to travel.
► If there is any uncertainty regarding the history or provenance of the work being lent, consider whether immunity from seizure is required and available in the country that the work is going to. Immunity from seizure can be essential when dealing with artworks that have a gap in their provenance and may have been lost, stolen or confiscated at some point in their history.
Some, but not all, of these risks can be mitigated through negotiations with the borrower and careful drafting of the loan agreement.
Establishing a good relationship with the borrowing institution, knowing what pitfalls to avoid and seeking legal advice will facilitate a successful loan.