Ever fancied a painting you couldn’t afford? A new business in Hong Kong now offers the option of buying art in instalments, much like how you would pay for a car. Called Artvantage, the service is in its infancy and will only in time build up a significant network of galleries. It also faces competition from banks desper­ate to hand out personal loans at a time when interest rates are at a historic low. However, the venture appears to be based on similar services elsewhere that have proven popular.

Own Art, in Britain, was set up by Arts Council England, a government agency, and its aim is to support living artists. People can borrow up to £2,500 (HK$25,500) for purchases at more than 230 galleries and repay in 10 monthly instal­ments, interest-free. Some galleries even offer loans of up to £25,000. The initiative has financed more than 35,000 purchases with a total value of £28.5 million since its launch in 2004.

Art Money was launched in Australia in 2015 with funding from the city of Sydney. It, too, offers interest-free loans to art buyers, at more than 165 galleries. It made 120 loans in the first eight months of operation.

Unlike these two examples, Artvantage charges buyers a fee, so it remains to be seen whether it will be able to lure customers in the same way.

“Galleries want to sell more and avoid dips in sales. We want to provide the liquidity so more people will buy art. This service can help galleries attract first-time buyers,” says William Duane, a former banker who launched Artvantage with Michael Donnan, a director of an art investment advisory and gallery.

Customers who have identified a work they want can go to the Artvantage website while they are still in the gallery and apply for what is effectively a loan of up to HK$300,000.

The money comes from a lender called WeLend, which charges sliding-scale fees depending on the loan amount and tenure (you can pay it back over six to 48 months). Like any personal loan, WeLend needs to see your identity card, proof of address and proof of salary – you can photograph these and upload them using your phone – and it will run a credit check.

Once the loan is approved, WeLend will send the money to Artvantage, which will then pay the gallery, ensuring any nefarious borrower doesn’t use the money for other purposes. Artvantage’s WeLend account appears to be enjoying better rates than the lender offers its direct clients. A HK$100,000 loan repaid over 12 months, for instance, costs 5 per cent over the year, compared with the up to 14 per cent that WeLend charges for the same amount and tenure on its own website.

That is because WeLend wants to deal with the kind of people who buy art, Duane says.

“WeLend is a major online lender in Hong Kong and backed by the likes of CK Hutchison’s TOM Group and venture capital fund Sequoia Capital. It has issued about 45,000 loans since 2012. The reason they have partnered with us is that they see this as a chance to move upscale, to tap middle-class demand,” he says.

The fee, which is basically the interest, is not that cheap compared with what credit­worthy individuals can get from high street banks. Citibank is offering rates as low as 2 per cent on loans of HK$100,000 to be repaid over 12 months. HSBC charges about 6 per cent.

But, Duane says, Artvantage, which gets a cut of each transaction, offers extra value because of its seamless, all-in-one website that doesn’t require the buyer to go some­where else to apply for a loan. It will, in future, also have a marketplace for galleries to sell art by instalments online.

“Once the loan is approved, you can walk away with the artwork. It’s yours, and not WeLend’s, because it’s an unsecured loan,” Duane adds.

“WeLend uses proprietary risk manage­ment technology and big data analytics to identify customers who have both the ability and willingness to repay, and, as a result, maintains a below-market delinquency rate compared with the major banks,” says Simon Loong, chief executive of WeLend. “The loans made through Artvantage are basically an unsecured lending product, so we won’t take the artwork [in cases of non-repayment].”

The first to sign up was Cheer Bell Gallery, a 4,000-sq-ft space in Tsuen Wan that sells modern Chinese ink paintings and Western art, including sculptures by Salvador Dali. Cat Street Gallery, in Sheung Wan, is also on the list. Victoria Foot, marketing manager at the latter, says the new service should interest young collectors.

“We are in the process of uploading art­works to the Artvantage website,” she says. “We hope it will encourage young people to buy art and invest. We are certainly excited to have another platform to show our artwork and support our artists.”

The Cat Street Gallery usually sells works in the range of HK$40,000 to HK$150,000, she adds.

Its current exhibition, a group show titled “Signal 8”, features limited-edition prints by local and Western artists. The gallery, how­ever, doesn’t expect buyers to use Artvantage to purchase these works as they are relatively afford­able, with some selling for less than HK$10,000.