Annie Leibovitz Pawns Rights to All Future Work

Annie Leibovitz, the celebrated New York photographer who has captured many of the most memorable images of the icons of Hollywood and Washington over the past 30 years, is not the kind of person usually associated with going to a pawn shop. But it seems that in these extraordinary times even the likes of Leibovitz need to find cash in extraordinary places.

The photographer, whose pictures of Michelle Obama adorn the March cover of Vogue, has turned to a company called Art Capital that specializes in lending money with fine art as the collateral.

The New York Times disclosed today that Leibovitz has borrowed about $15m (£10m) from the firm in two separate tranches.

Public records show that she secured the loan partly against property she owns, but also by putting up as collateral the copyright, negatives and contract rights to every photograph she has ever taken or will take in future.

Such an exceptional step, involving in essence the pawning of her entire life's work, may in Leibovitz's case be explained by the tumultuous few years she has been through. Her long-time friend Susan Sontag died in 2004, and she has been in costly litigation over the renovation of some of her properties.

But Leibovitz is part of a wider trend that Art Capital and specialist lending institutions like it have noticed pick up speed since the start of the global economic crisis last autumn.

Wealthy individuals and institutions, in various degrees of financial distress, have increasingly turned to the firm for help in return for putting up their fine art in numbers that have risen by 30% to 40% since before the crash.

"What's amazing is that individuals and institutions who previously we thought were untouchable are being deeply affected. People who were truly enormous financially are now scrambling," said Ian Peck, owner of Art Capital.

The firm expects to make about $120m in loans against art this year, up from about $80m in 2008. Some of that has gone out to several hedge fund managers, hit by the Wall Street collapse, who have put up striking contemporary and modern art works.

The company's offices, which are located next door to the designer Vera Wang's wedding dress showroom in an old Sotheby's building in Madison Avenue, resemble one of New York's more select art galleries, which to some extent is what it is. It currently displays a set of black and white photographs from the 1930s and 40s by the Magnum photographer Ernst Haas, as well as a room full of Old Masters including 17th-century works by the French painter Simon Vouet and Francisco de Zurbaran from Spain.

Among the art that have recently been taken in by the company, and put into secure and climate-controlled specialist art warehouses for safekeeping, are pieces by Willem de Kooning, Mark Rothko, Andy Warhol, Henry Moore and even Picasso. Cash-strapped clients have borrowed money against vintage film posters, antique teddy bears and valuable scientific instruments.

Peck has also witnessed several casualties of the recent spate of so-called Ponzi schemes - fraudulent pyramid scams - including that of Bernie Madoff, come pleading for financial help with their art collections as collateral.

But in these most desperate of cases, he said, the company would rarelybecome involved.

"If someone is on death's door financially we can't help them. Several times a month we see refugees from Ponzi schemes; their stocks are gone, the money's gone and they are looking at their hard assets."

Peck dislikes his business being described as upmarket pawn-broking, saying that is an over-simplification. He points out that he is an expert in art markets, having taken an MA with Christie's in London and run his own art gallery for almost a decade before he set up the company.

Firms like Art Capital typically lend out 40% of the value of the art works they take in, making most of their profit by charging interest of between 6% and 18%.

Peck said only about one in 10 of the deals end in default. "Our aim is to avoid defaulting at all costs. Given the trouble involved in a default, it's better karma and business not to."

But even if the works are not sold, and remain in the client's ownership awaiting their return in better economic times, Peck admits that this is intensely emotive stuff. "It's akin to giving up your home, particularly for people who have built up collections over many years. People don't feel emotionally about stocks and bonds, but they certainly do over art."

In the case of Leibovitz, Peck insists that very few places could have coped with her request for money based on her images.

"We're pleased to have her as a client and it's a very good fit. We are one of the few - if not the only - lender who could have valued her body of work; that's a fairly esoteric thing to value."