Who is LONO for?
LONO is for owners of art who want to leverage the value of their collection without having to sell. Our clients desire additional liquidity while maintaining ownership of their assets. We provide the ideal alternative to selling, while saving you the commission and transactional cost of selling your art as well as capital gains tax. LONO is also an excellent option for clients interested in buying new art as well! Please contact us to learn how.
Where does LONO operate?
While LONO is based in Toronto, we have appraisers, transport and storage options from coast-to-coast. LONO only provides loans to Canadian citizens (you must have a Canadian bank account) for art residing within Canada.
Who owns LONO?
LONO is a private Canadian company backed by substantial Founders with extensive personal collections and a passion for the arts.
Am I eligible for a loan?
Any Canadian individual who has reached the age of majority (including, but not limited to, all collectors, artists and dealers) with a government-issued picture ID, like a driver's license, is eligible for a loan. Your artwork secures your loan.
How much can I borrow?
LONO's minimum loan amount is $10,000. We can loan up to $1,000,000 per piece of art. LONO’s application process includes a preliminary assessment to determine if the artwork meets our minimum value requirement.
Do you accept all artworks?
We accept all artworks that can be appraised with a minimum Auction Value of $20,000.
What percentage of the value of my artwork can I borrow?
Our loan-to-value ratio is 50% of the appraised Auction Value of your artwork. As a part of the loan process, we work with a prominent Canadian appraisal house to provide a professional appraisal to determine the auction value of the art.
What are the interest rates?
Our typical simple interest rate ranges from 1.5 - 1.85% monthly (18 - 22.2% per annum), lower rates are available for larger loans. Unlike credit cards and other sources of debt that use daily or weekly compound interest calculations that can really add up quickly, our simple monthly interest calculation is easy to understand, transparent and much fairer for our clients.
What terms are available for the loan?
LONO offers loans of 12, 18 or 24 months. If your loan is in good standing and the value of the artwork is stable, we will offer an option to extend. A secondary appraisal, at the Borrower’s expense, may be required for loan extensions.
How do LONO rates compare with credit cards?
LONO uses simple interest calculations to ensure transparency and simplicity for our clients. Credit card companies use complex compounding - which costs the Borrower much more money. For instance, on a $100,000 LONO loan over 24 months, the Borrower will spend $12,000 LESS than had they used a credit card for the same amount and term. Furthermore, LONO interest may be tax deductible if you are using the loan for other investments (talk to your accountant).
Are there any upfront fees?
LONO offers the added-value of arranging every step of the loan process for you from appraisal to storage. Based on your application, we will provide an estimate on the cost of the appraisal which will be completed by an accredited Canadian appraisal house. The minimum appraisal fee is $300. There is no obligation or cost to apply, however, if you want to proceed with the loan process, the agreed-to appraisal fee is paid by the prospective borrower in advance of the appraisal, by credit card. There are no other fees until the loan is accepted.
What are the closing fees?
Upon closing of the loan, the only fees are 1) A Set-Up fee of $649 which includes credit checks, ownership and encumbrance searches, loan preparation, PPSA registration and 2) A Packing, Transport and Condition Report fee for the authenticity verification, packing and transport of your art. This fee will vary depending on location, as well as the number and size of pieces. LONO typically funds loans directly to its clients upon receipt of the art pieces. Some clients appreciate closing via an escrow agent, which LONO can provide as an optional service, at an additional fee of $600 per transaction.
What are the monthly payments and ongoing fees?
Your monthly obligations, paid through pre-authorized payment, are the loan interest (which depends on the size of the loan) and a monthly storage fee. These fees will be outlined in your loan contract.
Can I have an example of a representative loan showcasing the entire cost of borrowing?
Of course. We pride ourselves on our transparency when it comes to what you will be paying for your loan. If you are borrowing $100,000 on a one year term and are located a resonable distance from our art storage facility, the total cost of borrowing inclusive of all fees is: Appraisal ($300) + Set up ($649) + Transportation, Packing and Condition Report ($500) + Storage ($50 x 12 months) + Interest ($1500 x 12) = 20.05% (Note that where applicable, taxes are added to the fees)
How long does approval take?
After the application is submitted, a professional appraisal of your art must be completed which can often be completed within a few business days. After we have received the appraisal certificate, the loan offer will be sent to you the next business day.
Does LONO conduct a credit check?
Your credit score will not have a material impact on your ability to secure a LONO loan. LONO utilizes TransUnion as part of its process, but we offer loans to Borrowers with diverse financial backgrounds. Your art is the only security for your loan.
How long does it take to close and fund the loan once accepted?
Once the loan offer is accepted, funding can occur within 3 business days, often faster. Paperwork, logistics and funding typically take a few days to complete. Funding is provided as soon as condition reports are completed and the art is secure in our designated storage facility. If required, the process can be fast-tracked to get you your loan within 24 hours!
Do you take possession of artworks?
Yes, as per our lending agreement, we will take possession of the artwork upon approval of the loan agreement. Your artwork will be held in a state-of-the-art secure and climate-controlled art storage facility, Armstrong Fine Art Storage, and you will know where your art is at all times.
Who insures the art while in storage?
The borrower will add LONO as a “Loss Payee” on their policy so the current insurance policy remains in place while the art is transported and stored. If the piece is not insured, LONO will assist the borrower with obtaining the necessary insurance through our various insurance partners. LONO will review the “Care, Custody and Control” clauses in your insurance policy and will assist the borrower with the process.
If I don't have sufficient insurance to qualify for a loan, what do I do?
LONO works with Marsh Canada and they can arrange for the proper insurance for you from top insurance companies such as AXA, AIG, XL and Chubb. LONO will make the necessary introduction to Marsh Canada if additional insurance coverage is required.
How do I repay my loan at the end of the term?
Repayment can be handled by wire, money order or certified cheque by mail, or in person.
Are there any prepayment penalties?
You can prepay your loan at any point in time with no additional penalty. We are proud that all LONO loans are in compliance with the Consumer Protection Act.
What happens if I default on my loan?
In the rare case of default, we work with a prominent Canadian auction house to obtain maximum value for your art. All outstanding principal, interest, fees and termination costs are recovered and the net value, if any, is returned to the borrower.
What is your Referral Incentive Program?
We offer an incentive programs for successful referrals to our lending services. Please contact us for more details.