Can Interest-Free Loans Revive Sydney’s Contemporary Art Market?

The Sydney Morning Herald outlines a new company that’s getting municipal support to make interest free loans on Contemporary art. Unlike Europe and the US, the Australian Contemporary art market is still in the doldrums:

The organisation behind the program is 10 Group, the art publishing business that produces March’s non-profit art festival Art Month. Chief executive Paul Becker says the program is bringing “good retail practice to the industry”.

“Art is a fairly expensive upfront cost and I can’t think of any other industry that doesn’t offer credit,” says Becker. “Jeans, a fridge, a car – you can get them all on a sort of layby.”

The scheme works like this: If a work is $1000, a customer pays 10 Group 10 per cent, or $100 upfront. Then, over a set period of time, the customer pays the rest off in equal instalments. 10 Group pays the gallery within two weeks at a discounted rate – the difference between what the customer pays and what the gallery charges 10 Group is how Becker’s scheme makes its money.

The process also means 10 Group, not galleries or artists, assumes the risk. While there have reportedly been zero defaults on the 1,893 loans issued as part of Tasmania’s COLLECT scheme over six years, Becker says “we’re not so naive as to think there will be no default rate” in Sydney. By paying the galleries quickly, “we take the risk of taking on the credit”.

Interest-free loans for contemporary art on the table at City of Sydney (Sydney Morning Herald)