Can museums use bridging finance to purchase new acquisitions?
One challenge most museums face is funding new acquisitions. Many high-quality pieces come onto the market each year that are suitable for museums, but they often cannot raise funds in time to purchase them before a private collector. Could bridging finance be an answer?
Using art as security for a loan is common in the US and increasingly so in Europe. Timothy Hunter, writing in Apollo, the art magazine, has suggested that museums could use art that they own to secure a bridging loan to acquire new additions to their collection. This could be similar to how private collectors have obtained bridging loans secured on their existing art.
Museums often raise funds through grants and donations, but this takes time. Sellers may not be willing to wait to give museums time to raise funds. A bridging loan could therefore be used to buy a work of art, and this will give the museum time to apply for grants and request donations to repay the bridging loan.
Some museums sell several less important items in their collection to raise finance for new acquisitions, but bridging loans could mean they may not have to sell any of their collection.
Specialist bridging finance lenders will consider loan applications for complex or unusual purposes. They may be willing to consider bridging loan applications from museums but will have to be convinced that the museum is able to raise the funds needed to repay the loan.