"The typical client will be approved for, let’s say, $10 million and will use the loan and pay it back again, just as people use charge cards," says Gyorgy. "Some people, like a hedge-fund manager, will use a term loan, where they’ll draw the whole thing right away. We have art dealers, real estate developers, private equity — basically entrepreneurial people." Some loans must be paid down monthly or every four months, while others function like balloon mortgages, with lump-sum payments of interest and principal due at the end of their terms.

Acceptable collateral also depends on the lender. "We lend against things where there’s an active auction market," says Augenblick of Emigrant, which takes rare musical instruments as well as fine art. Rosenthal, on the other hand, won’t allow Old Masters (too difficult to authenticate) or antiquities (too hard to store).

Another variable is the interest rate. Citi Private Bank charges just a few points above the London Interbank Offered Rate. Libor, currently 1.66 percent, is what big banks charge each other for overnight loans — in other words, it’s the lowest commercial rate available. In contrast, places like Rosenthal, ACG, AFP and Artloan charge 12 to 24 percent annually.

Who keeps the collateral is another question. In general, private banks like Citi allow borrowers who are U.S. residents to keep pledged works, while factors like Rosenthal, which lend primarily to dealers, want them handed over.

The issue of possession becomes critical if a borrower defaults. Works in a client’s home are difficult to seize; those in a storage facility controlled by the lender are not. Either way, failed loans can have serious repercussions for all the parties involved.

For borrowers the consequences are clear: They lose their property. Ask Veronica Hearst. The socialite had to give up several valuable Old Masters when she defaulted on a 2008 loan to ACG. But lenders also are at risk. First Republic Bank suffered tens of millions of dollars in losses on loans to Larry Salander that were backed by the Old Master inventory of his Salander-O’Reilly Galleries. Now that the business is being liquidated, many of those works are missing or mired in litigation over their ownership.

If, despite the caveats, you still want to borrow against your collection, the first thing to ask yourself is what do you want to do with the money and how long will you need it. If you want a long-term loan, Citi Private Bank might be the way to go. While many lenders turn to auction houses to appraise collateral, Citi has its own in-house specialists.

If you need the money in a hurry, however, you may want to go to an auction house.

Sotheby’s shies away from long-term commitments but will provide short-term bridge financing to consigners who need it to, say, pay estate taxes ahead of an auction. A client might be able to borrow half the low estimate of his or her artwork’s value at three percentage points above the auction house’s own borrowing rate.

"The emphasis is on the business that will come up for auction in the next six months to a year," says Jan Prasens, the managing director of Sotheby’s Financial Services, "as opposed to doing just straight-term financing for an undefined period where there’s no certainty of any immediate business."

Christie’s has a similar view. "We loan almost exclusively in regard to upcoming sales, as opposed to a long-term lending portfolio, which we don’t have," says the firm’s president, Marc Porter. "We’re not actively soliciting lending business unless it is consignment based." Christie’s also tacks on just three percentage points to its cost of funds.

While the auctioneers are hoping to boost their current business via art-backed lending, the private banks are looking to the future. "We’re with our clients in the bad times so they can be with us in the good times," says John Arena, senior vice president and custom-credit executive at U.S. Trust, Bank of America Private Wealth Management. "We do have a very involved art-finance program, and the deals are in the millions of dollars," he says. "We’ve actually seen a pickup in clients looking to take advantage of the pullback in art prices by purchasing more art."