Lombard lending – the practice of borrowing against one’s investment portfolio – has surged in relevance for high-net-worth (HNW) clients in 2025. With interest rates lingering around 4% as inflation cools to 3.8%theguardian.com, traditional borrowing has grown more expensive than it was in the ultra-low-rate 2010stheguardian.com. At the same time, market volatility and economic shifts are prompting wealthy individuals to seek flexible financing that doesn’t derail their long-term investment strategy. In this context, tools like Lombard loans have gained traction.

In fact, short-term financing solutions in general are on the rise. For example, bridging loans are being used more than ever in 2025 to raise capital quickly and secure time-sensitive dealswillowprivatefinance.co.uk. Lombard lending offers a different but complementary route: instead of leveraging property, it lets clients tap into the value of stocks, bonds, and other investments. Willow Private Finance – as a specialist independent mortgage and finance brokerage – has seen first-hand how HNW clients are increasingly exploring such whole-of-market options to stay financially agile.

This guide will dive into Lombard lending in detail. We’ll start with the market context in 2025, then explain how Lombard loans work and what assets can be used as security. We’ll examine when lenders approve these loans (and when they don’t), outline the risks and margin call triggers, and discuss pricing and private bank considerations. We’ll also walk through strategic use cases – from funding UK property purchases to tax planning moves – and the outlook beyond 2025. Along the way, we’ll reference Willow Private Finance’s insights and relevant industry trends (see our in-depth piece on Private Bank Mortgages Explained: Benefits and Drawbacks for related HNW lending context). By the end, you’ll understand how Lombard lending can fit into a smart financial strategy, and how Willow Private Finance can help you navigate these complex, high-value loans.

Market Context in 2025

The financial landscape of 2025 has been defined by higher borrowing costs and a search for liquidity solutions. After a period of rapid rate hikes in the early 2020s, the Bank of England’s base rate sits at 4% going into late 2025theguardian.com. Inflation has cooled from its peaks (down to ~3.8% in mid-2025) and is expected to gradually trend back towards target over the next couple of yearstheguardian.com. Even so, today’s interest rates are a world apart from the near-zero levels many borrowers enjoyed a decade ago. A rate of 4% – or even a potential dip to 3% in coming years – is still well above the ultra-low norms post-2008theguardian.com. For HNW individuals, this means the cost of tapping credit is materially higher, spurring a greater focus on efficiency in lending.

Equity and property markets in 2025 are also sending mixed signals. Equity investors saw strong gains in certain sectors (like tech) in recent years, but also face bouts of volatility. Real estate, particularly in prime London and other sought-after areas, remains attractive yet more expensive to finance due to higher mortgage rates. Traditional lenders (high-street banks) have become somewhat more cautious on large or complex loans, making private banks and alternative financing options more important for HNW clients. Indeed, many wealthy clients who could once rely on straightforward bank loans now find they must present stronger collateral or accept tighter terms to secure financing.

This backdrop has set the stage for Lombard lending to flourish. HNW clients often have substantial assets tied up in investment portfolios – blue-chip stocks, bonds, funds, etc. – that they’d prefer not to liquidate. Selling investments might lock in capital gains tax liabilities or interrupt long-term growth at an inopportune time. Lombard loans offer a timely solution: borrow against the value of those investments without selling. Private banks and wealth managers have been actively offering this form of credit to cater to liquidity needs while keeping clients’ portfolios intactrothschildandco.com. It’s an appealing proposition in a year when cash is king but market participation remains crucial.

Notably, the use of Lombard lending dovetails with other strategies HNW individuals are employing. For instance, bridging finance (secured against property) is being used to seize property opportunities or cover short-term cash demands willowprivatefinance.co.uk. Lombard lending achieves similar aims via a different route – by leveraging securities instead of real estate. Both options highlight a broader 2025 trend: wealthy clients using innovative, asset-backed loans to manage cash flow, rather than resorting to fire sales of assets. In the following sections, we’ll explore exactly how Lombard loans work and why they’re becoming a cornerstone of HNW financial planning in the UK.

How Lombard Lending Works

Lombard lending is essentially a form of portfolio-backed lending. In a Lombard loan, the borrower pledges liquid financial assets – typically a portfolio of stocks, bonds, or funds – as collateral to the lender in exchange for a cash loan. The term “Lombard” comes from the Lombardy region of Italy, alluding to the historical practice of securing loans with valuable goods. Today, it’s a staple offering of private banks and wealth managers who serve affluent clientele.

Here’s how it works in practice: you approach a lender (often your private bank or an institution introduced via a broker like Willow) and offer a portfolio of investments as security. The lender assesses the market value and composition of those investments and agrees to lend a percentage of that value to you as cash. You continue to own your investments, but they are held as collateral by the bank – usually in a custody account – for the duration of the loan. Crucially, you do not have to sell your holdings; you retain any dividends, interest, or growth (though you typically can’t trade or withdraw the assets while pledged).

Lombard loans are typically structured as revolving credit lines or term loans. Many are relatively short-term in nature – often ranging from a few months to a couple of years. In fact, terms can be as short as a week or as long as ~24 months, depending on the use case and lender. They function a bit like an overdraft secured by your portfolio: you can draw funds when needed (up to the agreed limit) and repay when liquidity improves or at the end of the term.

Underwriting for Lombard loans is fast and efficient because it hinges mostly on the quality of the collateral, not on detailed income checks or property surveys. The lender’s main concern is the real-time value and volatility of the assets you’re pledging. Because the loan is fully secured by liquid assets, credit approval can often happen quickly – sometimes in a matter of days – once the portfolio is evaluated. This contrasts with, say, a mortgage process which might involve protracted property valuations and income vetting. As a result, Lombard lending has become known as a swift liquidity tool for those who have substantial investments but need cash readily.

It’s important to note that Lombard loans do not typically fall under standard mortgage regulation. They are considered a form of asset-backed financing and, in many cases, are unregulated (since no property is being mortgaged). That means borrowers don’t get the same consumer protections as with a residential mortgage – a point to be aware of, though private banks still adhere to robust risk management.

To illustrate the concept, imagine you have a £5 million portfolio of stocks and bonds. Rather than selling £1 million worth (and potentially incurring capital gains tax and losing future upside) to raise cash for an investment, you could pledge the £5M portfolio to a bank and obtain, say, a £3 million Lombard loan (the exact amount depends on the allowable loan-to-value, which we’ll cover next). You’d pay interest on the £3M loan, while your portfolio stays invested. Later, you might repay the loan from other funds or by gradually selling investments at a more opportune time. In the interim, you achieved your liquidity goal without disturbing your investment strategy. This efficient dance between liquidity and investment continuity is exactly what makes Lombard lending attractive.

What Assets Can Be Used as Security

One of the key questions for Lombard lending is: what can I use as collateral? Lenders will only accept certain types of assets – generally those that are liquid, stable, and easy to value. The most common eligible assets include:

• Listed equities (stocks) – especially blue-chip shares trading on major exchanges. Diversified portfolios of large-cap stocks are ideal, as they can usually support higher lending percentages.

• Bonds – government and investment-grade corporate bonds are highly preferred collateral due to their stability and predictable valuation. Top-quality bonds might even fetch higher loan-to-value (LTV) allowances.

• Investment funds and ETFs – diversified mutual funds, index funds, and exchange-traded funds can be acceptable, particularly if they have daily liquidity.

• Cash and cash equivalents – though if you had cash, you might not need a loan, some use cash or near-cash instruments in accounts as part of collateral mix.

• Life insurance policies with cash surrender value – some lenders will lend against the guaranteed surrender value of certain life insurance contracts.

• Other marketable securities – this can include things like treasury bills, certain structured notes, or even shares in hedge funds or private equity (if redemption terms are clear), though these are assessed on a case-by-case basis.

The overarching requirement is that the assets must be liquid and marketable. The lender wants assurance that if it needed to sell the collateral, it could do so quickly and recover the loan value. That’s why assets like real estate (illiquid) or private company shares (hard to value/sell) are generally not used for Lombard loans (real estate is instead used for mortgages or bridging loans). Similarly, highly volatile or obscure assets might be discounted heavily or declined.

Each asset type carries a different risk profile, which translates into different LTV ratios – i.e. what percentage of the asset’s value the bank will lend. Typically, lenders start with a base LTV of around 50%–60% for a well-balanced portfolio. This means if your portfolio is worth £10 million, you might get a £5–6 million credit line. The buffer exists to protect the bank against market fluctuations. However, LTVs aren’t one-size-fits-all:

• A portfolio of blue-chip, low-volatility stocks and high-quality bonds might qualify for a higher LTV, perhaps up to 70% or more. In some cases, government bonds can be so secure that banks lend as high as 80% against their value.

• On the other hand, a portfolio concentrated in a few volatile stocks or emerging market equities will see a lower LTV – maybe 40–50% – reflecting greater price risk.

• Single-stock positions (e.g. if a client’s collateral is mostly one company’s shares) are often capped at low LTVs unless it’s a very stable, large company. Too much concentration equals higher risk for the lender.

• If life insurance is accepted, the loan might only be up to, say, 90% of the surrender value, to leave a cushion.

These LTV determinations are part of the initial setup. Once your Lombard facility is in place, the bank will usually monitor your collateral daily. Thanks to modern systems, they track the market value of your portfolio and recalculate the LTV in real time. This is important for risk management – both yours and the bank’s – as we’ll see in the section on margin calls.

In summary, the best collateral for Lombard lending is a diversified, high-quality investment portfolio. Stocks, bonds, and funds that trade easily and don’t swing wildly in value are ideal. The more exotic or volatile the asset, the less likely a lender will count it fully (or at all) toward a Lombard loan. Before approaching a lender, it’s wise to review your portfolio’s makeup. Often, HNW clients will move assets or raise the quality of their holdings in order to meet a private bank’s criteria. Willow Private Finance can assist in liaising with lenders to clarify what parts of your wealth can be leveraged and under what terms, ensuring you put forward the strongest collateral package.

When Lenders Say Yes (and When They Don’t)

Lombard lending may seem straightforward – you have assets, you want a loan – but private banks and lenders apply specific criteria in deciding which proposals to approve. Essentially, lenders say “yes” when the loan is a good bet (strong collateral, reputable client, sensible purpose) and “no” when the risk or fit falls outside their comfort zone. Let’s break down the typical considerations:

When do lenders say YES?

• Sufficient AUM and Relationship: Private banks usually extend Lombard loans to clients who either already bank with them or are willing to bring substantial assets under management. Many top banks have minimum asset requirements – for instance, £1 million+ investable assets is a common threshold just to qualify as a private banking clientprycewilliams.co.uk. Some prestigious banks set the bar even higher (e.g. £3M at Barclays Private or £5M+ at certain international banksprycewilliams.co.uk). If you meet these thresholds or agree to transfer funds to the bank’s custody, you’re more likely to get a yes.

• High-Quality Collateral: As discussed, lenders favor diversified, liquid portfolios. If you present a basket of FTSE 100 stocks and UK gilts, for example, most private banks will be eager to lend against it. They know they can easily value and sell these assets if needed. In contrast, a speculative AIM stock or crypto holdings would raise eyebrows – most traditional lenders would decline such collateral outright.

• Conservative Loan-to-Value: If you only seek, say, 40-50% of your portfolio’s value as a loan, the bank has a big safety net. They’re more inclined to approve a modestly geared request than one pushing the maximum LTV. A lower initial LTV means it’s less likely you’ll hit trouble in a market dip.

• Clear Purpose (Within Policy): Lenders usually ask what the loan is for – not to micro-manage your finances, but to flag any unacceptable uses. Generally, Lombard loan proceeds can be used for almost any legal purpose: buying property, investing in a business, paying a tax bill, etc. In fact, common uses are real estate purchases, tax liabilities, business financing or bridging other investmentsprycewilliams.co.uk. These are all fine by the bank. They usually don’t want you to use the money to speculate on highly risky investments or to purchase their own bank’s securities (no double-counting collateral)prycewilliams.co.uk. Assuming your intended use is legitimate and aligns with the idea of managing liquidity (and not something reputationally problematic), it should be acceptable.

• Credible Client Profile: Soft factors matter too. HNW lending is a relationship business. A client with a solid track record, transparent source of wealth, and a history with the bank (or introduced via a respected broker like Willow) will get quicker approval. Banks conduct due diligence – KYC and AML checks – and if everything checks out, it greases the wheels for a yes. High-profile private banks especially prefer to lend to clients who might also use other services (investment management, etc.), making the Lombard loan part of a bigger relationship.

When do lenders say NO (or not yet)?

• Insufficient or Unacceptable Collateral: The fastest way to a “no” is offering collateral the lender won’t touch or doesn’t value enough. If your assets are too volatile, too concentrated, or not easily liquidated, the bank may decline or offer to lend only a very small amount. For example, a single-stock portfolio heavily weighted in a tech startup might be a non-starter. Or if you only have £100k in stocks (and no intention to add more), that might fall below many banks’ minimum lending size – they may require a larger portfolio (often £250k+ or £500k+ minimum loan amounts are stipulated by some institutions).

• Over-Leverage Request: If you ask for an LTV that’s at the upper limit or beyond what policy allows, a prudent lender will say no or counteroffer at a lower amount. They need that buffer for market swings. Going to, say, 80% LTV on a basket of shares would likely be rejected unless the assets are ultra-safe (and even then, 80% is rare except for top-quality bonds). Essentially, if the loan would leave them no room for error, they’ll decline.

• No Willingness to Move Assets: Some prospective borrowers approach Lombard lending hoping to get a loan against assets held at another bank or in a brokerage, without moving them. Most private banks will insist you transfer the portfolio into their custody (at least for the loan’s duration). If a client is unwilling to do that, many lenders won’t proceed. They want control over the collateral. There are specialist lenders who might structure it differently, but expect to at least pledge the assets formally to the lender’s charge.

• Purpose Outside Guidelines: While broad, there are a few uses that might draw a no. For instance, using a Lombard loan to directly buy more speculative investments (leveraging your portfolio to buy penny stocks or cryptocurrency) could be frowned upon. It’s not that the bank can always police the use of funds, but if stated upfront and it’s something like “I want to take this loan to invest in a high-risk venture”, a conservative lender might balk or require lower LTV. Also, if the purpose violates any law or sanction (obviously), it’s a no.

• Client Risk Factors: Occasionally, a loan is declined due to the client’s profile rather than the assets. Issues with transparency of funds, regulatory red flags, or simply not meeting the private bank’s wealth criteria (e.g. below their minimum wealth threshold) can result in a polite “unfortunately we cannot assist.” Each bank has its niche; some only want ultra-HNW (£10M+ clients), so a smaller HNW client might be turned away or referred to another institution. Additionally, if the client’s overall financial situation is very precarious outside the portfolio – say they have massive other debts or no income at all to cover interest – a lender could be concerned about ability to service the loan (though interest can often be capitalized/added to the loan in Lombard facilities).

In summary, lenders green-light Lombard loans when the collateral is solid and the relationship makes sense, and they pull back when either the assets or the circumstances pose too much risk. It’s a balancing act of risk management. Many private banks actually like Lombard lending because it’s low-risk (from their perspective) and helps deepen relationships with clients (since clients often bring more assets in). But each deal still has to fit their framework. This is where Willow Private Finance adds value – by knowing which lenders are likely to accept which assets and situations. For example, some banks may be more flexible with single-stock collateral if it’s a stock they know well; others might have lower minimum loan sizes which could suit a client with a smaller portfolio. We help match the client to the right lender, increasing the odds of an enthusiastic “yes” rather than a frustrating “no.”

Risks and Margin Call Triggers

While Lombard lending can be a powerful tool, it comes with its own set of risks that HNW borrowers must carefully manage. The primary risk to understand is the possibility of a margin call – a demand from the lender for additional collateral or partial loan repayment if your portfolio value falls. Let’s unpack how that works and what other risks are in play.

Market Risk and Margin Calls: Because a Lombard loan is secured by market-dependent assets, the biggest risk is that those assets drop in value. Lenders mitigate this with the initial LTV buffer, but significant market declines can eat into that cushion. If your collateral value falls enough that your current LTV breaches a certain threshold (often a trigger point around the original LTV or slightly above it), the lender will issue a margin call. This is essentially the bank saying: “Your loan is no longer adequately covered by the collateral’s value. Please restore the ratio.”

As a borrower, you generally have two ways to respond to a margin call:

1. Provide additional collateral – e.g. pledge more securities or cash to shore up the total value.
2. Pay down part of the loan – reducing the loan balance so that the LTV comes back in line.

If you fail to do either in the timeframe given (which could be very short – sometimes just a few days, or even immediate in extreme market freefalls), the lender has the right to start selling your collateral to reduce their exposure. They will typically sell just enough assets to bring the LTV back to acceptable levels. However, this can lock in losses for you, because it often means selling at a market low point – precisely what Lombard lending was meant to help avoid.

Consider an example: You have a £10M portfolio and took a £6M loan (60% LTV). A sharp market downturn hits and your portfolio value drops to £7.5M. Suddenly, that £6M loan is 80% of the collateral value. The bank might tolerate up to, say, 70% before calling. At 80%, you’re well past comfort – a margin call is triggered. You might be asked to add ~£2M in additional securities or cash, or to pay the loan down by that amount, immediately, to bring LTV to safer territory. If you can’t, the bank will start selling off bits of your portfolio (maybe dumping some stocks or funds) to raise that £2M and reduce their loan exposure. Now you’ve effectively been forced to sell in a downturn – the very scenario you wanted to avoid. Plus, you still owe the remaining £4M loan (now maybe 4/7.5 = ~53% LTV again, which is okay).

An important point: You are liable for the debt even if the collateral sale doesn’t cover it. Lombard loans are typically full-recourse. If, after liquidating all pledged assets, there is still an outstanding balance, you must repay it. The lender can pursue you for any shortfall. That scenario is rare (it would require an extreme value collapse), but it underscores that Lombard loans are not “walk away” debts. You can’t just hand over the portfolio and call it even unless its value fully covers what you owe.

Interest Rate Risk: Most Lombard loans carry floating interest rates – often quoted as a margin above a base rate (e.g. LIBOR or its successor, SONIA, plus X%). The good news is that because the loan is secured, the margins are relatively low. We’ve seen cases of rates around 1% per annum for very conservative loans with top collateral. More commonly, you might pay somewhere in the low single digits (perhaps 2–4% above base, depending on the deal). However, if base rates move up, your cost of borrowing increases. In 2025, base rates are relatively high; if they were to rise further, Lombard loan interest would rise in tandem. Conversely, if rates fall (which some expect in the coming years as inflation normalizes), your Lombard loan could become cheaper to carry. Either way, you should be prepared for rate fluctuations and factor interest costs into your cash flow planning.

Liquidity and Refinancing Risk: Lombard loans often have short maturities or review periods. There’s a risk that when the loan comes due, the lender might not renew it or might revise terms (especially if your portfolio has declined or your situation changed). You’ll need a plan for repayment – whether that’s selling a portion of assets at that time, refinancing through another facility, or having cash on hand. If your strategy was to use a Lombard loan as a bridge (for example, to buy a property pending a mortgage), be mindful of timing so you’re not caught having to roll over the loan in unfavorable conditions.

Asset Concentration Risk: If your pledged assets are heavily correlated (e.g. all tech stocks), a sector downturn could hit you harder than a diversified index would. This increases margin call risk. Some lenders mitigate this by applying higher “haircuts” (lower LTVs) on concentrated positions or by requiring diversification as a condition of the loan. It’s wise for your own safety to avoid over-concentration when you plan to borrow against assets.

Operational Risk: This is minor but worth noting – if you need to meet a margin call or adjust collateral, there could be logistical hurdles (especially if assets are held across jurisdictions or if you’re traveling/unreachable). Using a Lombard loan means staying somewhat engaged with your portfolio’s status. Working with a proactive advisor or broker can help ensure you get timely notices and advice. Willow Private Finance, for instance, often liaises between clients and lenders, so if markets turn suddenly, we can help strategize the best response (whether that’s moving in extra collateral from elsewhere or arranging a quick partial repayment).

No FSCS Protection on Investments: Remember, the assets remain invested. Their value can go down as well as up, and unlike cash in a bank, investment losses aren’t protected by something like the Financial Services Compensation Scheme. This isn’t a risk of the loan per se, but it’s part of the picture – you’re leveraging your investments, so typical investment risks still apply, now with leverage amplifying the stakes.

In essence, Lombard lending’s risks are largely the flip side of its advantages. It’s powerful because it lets you stay invested, but that means you’re exposed to market swings and must act if things swing too far. The key is prudence and contingency planning. Don’t max out your credit line just because you can. Keep some buffer; monitor your loan-to-value; have readily available funds or additional assets you could pledge in a pinch. Many HNW individuals even negotiate automatic top-up arrangements – for instance, keeping a cash reserve with the bank that can automatically be added as collateral if needed, to stave off forced sales. At Willow, we emphasize these precautionary measures. By structuring the loan conservatively and keeping communication open with the lender, you can greatly reduce the chance of a nasty margin call surprise.

Pricing and Private Bank Considerations

How much does a Lombard loan cost? The pricing of Lombard lending is another aspect where it shines compared to other forms of credit. Because the loan is fully secured and relatively low risk for the lender, interest rates are often very competitive – substantially lower than unsecured loans, and sometimes even lower than standard mortgages (depending on the scenario). Let’s delve into pricing elements and the unique considerations that come with borrowing from private banks or wealth managers.

Interest Rates: Lombard loan rates are typically quoted as floating rates tied to an interbank rate or the bank’s base rate. For example, a lender might offer “SONIA + 1.5%” or “Base Rate + 2%” for a given loan. The exact margin depends on:

• The quality of collateral (higher quality can get you lower rates).

• The loan size (very large loans might secure finer pricing due to economies of scale or importance of the client).

• The loan-to-value (a conservative LTV could get a sharper rate, since the bank’s risk is minimal).

• The overall relationship (clients who also invest through the bank or use other services might get preferential terms).

In some instances, we’ve seen Lombard loans on first-class collateral go out at near 1% annual interestennessglobal.com – essentially ultra-cheap money, often reserved for big-ticket, low-LTV arrangements. More commonly, rates might be in the 2–5% range per annum as of 2025. This is still quite attractive when you consider that many standard variable mortgage rates have been in the 5–6% range recently, and unsecured personal loans for high amounts could be 6–8% or higher.

It’s important to compare apples to apples: a bridging loan against property, for example, often carries interest of 0.75% per month (~9%+ APR) because it’s short-term and higher risk. Lombard lending, by contrast, might cost just a few percent per year – a huge savingennessglobal.com. That said, if your portfolio is riskier, a lender could charge a bit more margin to compensate. For instance, lending against a single high-volatility stock might come at a premium rate (or they simply lend less against it rather than charge more).

Fees: Beyond interest, consider fees:

• Arrangement fee: Some private banks charge a setup fee, often a percentage of the loan (e.g. 0.5% – 1%). Others might waive it, especially for existing clients or large loans. Brokers like Willow can sometimes negotiate fee reductions for our clients, given the volumes we introduce.

• Commitment fee: If the facility is structured as a line of credit (where you only pay interest on what you draw), a bank might charge a small commitment fee on the undrawn portion, say 0.25% per annum, as a sort of “standby” fee. This isn’t always present, but it’s seen in some cases.

• Exit or early repayment fees: Lombard loans are usually flexible when it comes to early repayment – many have no early redemption penalties, as the idea is to allow you to pay back as it suits you. But double-check; a few structured as fixed-term might have a minimum interest period.

• Custody or management fees: If you’re moving assets to a bank for collateral, that bank might start charging you fees for portfolio management or custody unless waived. Often, if you’re just using a custody account and not giving them discretion to manage investments, the fees are minimal or negotiable. However, private banks may hope to manage your money (for a fee) as part of the relationship. Always clarify this: you might negotiate that assets are held as collateral without a mandated management fee, especially if you have an external investment advisor or prefer self-management.

Private Bank Considerations: Borrowing from a private bank isn’t just a transactional experience; it’s a relationship. Here’s what to keep in mind:

• Assets Under Management (AUM) Requirements: As mentioned, many banks will require you to deposit a certain amount of assets with them to qualify for a Lombard loan. This can be a double-edged sword. On one hand, it consolidates your banking and can yield perks (like access to their exclusive services or events). On the other, it effectively ties up your wealth with one institution, and you may have to consider the opportunity cost (perhaps your investments were being managed elsewhere or you liked a different platform). However, these AUM requirements are sometimes negotiable or flexible. For example, if you don’t meet the threshold, a bank might still do the loan but at a slightly higher rate, or encourage you to gradually move assets over.

• Cross-Selling and Relationship Depth: Private banks excel at offering integrated services. When you come for a Lombard loan, don’t be surprised if they also pitch wealth management, estate planning, or bespoke deposit accounts. This isn’t necessarily bad – you might find value in their offerings – but always remember you have no obligation to take additional services. As an independent broker, Willow Private Finance’s role is to advocate in your interest; we can politely fend off any unwanted cross-sell, or help you evaluate if any of it is genuinely beneficial. Some clients actually appreciate consolidating services, while others strictly want the loan and nothing more.

• Service and Speed: Private banks pride themselves on personal service. You’ll likely get a dedicated advisor or relationship manager. In many cases, having a strong relationship manager can mean quicker credit approval and smoother handling of any issues. On the flip side, not all private banks are equal – some can be surprisingly slow or bureaucratic (especially big global banks) despite the white-glove image. Part of Willow’s job is knowing which lenders can execute quickly when time is of the essence. Generally, smaller boutique banks or those where we have established contacts can push a Lombard loan through in days, whereas a very large bank might take a few weeks and multiple committee sign-offs.

• Currency and International Considerations: If your portfolio is multi-currency or if you want the loan in a different currency (say, you have a USD investment account but need a loan in GBP to buy UK property), private banks can accommodate that. They might lend in the currency of your assets or in another major currency with appropriate adjustments. This is something to plan for – currency mismatch introduces FX risk, so often it’s best to borrow in the same currency as the need. Some HNW borrowers intentionally borrow in a currency with lower interest rates (e.g. euros or yen) but that’s a sophisticated play involving FX speculation; not usually recommended unless you have specific expertise or hedging in place.

• Credit Exposure Limits: A single bank will have an internal limit to how much they’ll lend to one client relative to their assets. If you are extremely wealthy and looking to borrow, say, £50 million against a £100 million portfolio, one bank might be fine with that, but another might cap you lower simply due to risk concentration limits. In such cases, syndicating across banks or using multiple loans could be a solution. Willow can coordinate multi-bank solutions for very large requirements, ensuring you get the total liquidity needed.

In summary, Lombard loan pricing is generally borrower-friendly for HNW clients, especially when compared to other financing options. The combination of low interest rates and flexible terms (like interest-only structures or no early repayment penalties) makes it a cost-effective way to raise cash. But the trade-off, and what you pay in a less direct way, is the need to maintain a relationship and often bring assets to the bank. As a whole-of-market broker, Willow Private Finance helps clients navigate these considerations – ensuring you not only secure a great rate, but also with a lender whose requirements and style align with your preferences. We also keep an eye on the market: if another provider offers a better deal or if pricing trends shift (for example, if base rates move significantly), we can help you refinance or negotiate adjustments, so you’re always getting the most value out of your Lombard facility.

Strategic Use Cases for HNW Clients



Why might a high-net-worth individual choose a Lombard loan instead of other financing methods? The answer lies in strategic flexibility. Lombard lending can be a savvy move in several scenarios, allowing clients to solve financial puzzles in ways that preserve or enhance their overall wealth position. Let’s explore some common and clever use cases:

1. Seizing Property Opportunities (Fast and Without Disrupting Investments):

UK property transactions often demand quick action – whether it’s snapping up a prime London flat in a competitive bidding situation or completing a purchase within a tight deadline (such as an auction purchase). If a significant portion of your net worth is tied up in investments, you might be asset-rich but cash-poor at a given moment. A Lombard loan can unlock cash fast to act on property deals. For example, one might use a Lombard facility to raise a hefty deposit or even fund an entire purchase upfront, then later refinance the property with a traditional mortgage. This way, you don’t miss out on the purchase and you avoid selling off investments in haste. It’s similar to how bridging loans are used, but here you’re leveraging your stocks and bonds instead of another property. We’ve seen clients do this to great effect – essentially using their investment portfolio to bridge a property acquisition, then repaying the Lombard loan once longer-term property financing is in place or after they receive expected funds from elsewhere. The speed of arranging a Lombard loan (often days or a couple of weeks) can match the urgency of property timelines, making it a valuable arrow in the quiver for real estate entrepreneurs and investors.

2. Tax Planning and Bill Payment:

Large tax liabilities are an inevitable reality for many HNW individuals – whether it’s an income tax payment on a bonus, a capital gains tax (CGT) bill from a profitable investment, or inheritance tax planning for wealth transfer. Using a Lombard loan can be an efficient tax planning toolprycewilliams.co.uk. Rather than liquidating assets to pay a tax bill (and possibly triggering further taxes or losing future growth), clients can borrow against their portfolio to pay the tax, and then repay the loan over time or when it’s optimal to liquidate assets (such as in a new tax year or after certain holdings have appreciated further). For instance, suppose you have a £2 million CGT bill coming due in January because you sold a business or an investment property. Your wealth is in stocks that, if sold now, would incur more CGT or aren’t at a price you want to sell. A Lombard loan can cover the tax bill now. Over the next year or two, you might gradually sell down some investments when it makes sense (using annual CGT allowances, or waiting for a market rally), and use those proceeds to pay off the loan. Thus, you avoid a fire-sale of investments and potentially reduce the overall tax impact. Additionally, Lombard lending is popular for inheritance tax (IHT) planning: for example, if heirs inherit a portfolio but face a 40% IHT bill on the estate (which might be due before assets are easily turned into cash), they could use Lombard borrowing to settle the tax, then decide which assets to sell in a more orderly fashion. In life, a patriarch/matriarch might also use a Lombard loan to gift money to children or a trust while keeping their portfolio intact, thereby starting the 7-year clock on IHT gifts without losing their investment returns – effectively leveraging to pass on wealth in a tax-efficient manner.

3. Business and Investment Opportunities:
HNW clients are often involved in business ventures or have access to unique investment opportunities – perhaps a chance to invest in a private equity deal, acquire a stake in a company, or inject capital into their own business for expansion. Timing can be critical for these opportunities. Lombard loans provide a ready source of opportunity capital. For example, an entrepreneur might use a Lombard facility to inject capital into a new project or company acquisition, especially if conventional business loans are too slow or not available on favorable terms. Since Lombard loans don’t require business plans or performance covenants (the bank only cares about the collateral), it’s a quick way to fund entrepreneurial moves. We had a client who, upon identifying a lucrative investment in a tech startup, drew £1 million via Lombard lending against his bond portfolio rather than pulling funds out of his existing investments and potentially disrupting his carefully balanced portfolio. By doing so, he remained invested in bonds (which continued to earn interest) and also capitalized on the new venture. Down the line, a liquidity event from the venture or other sources can clear the Lombard debt.

4. Avoiding “Crystallising” Investments at the Wrong Time:

This is arguably the core philosophy behind Lombard lending. Markets can be fickle. If a HNW investor has a substantial portion of net worth in, say, equities, they may be understandably loath to sell during a market dip or just before an anticipated upswing. Lombard loans allow them to remain in the market. As Rothschild & Co eloquently note, a Lombard loan lets you remain invested rather than having to sell part of your portfolio, thus not disrupting your strategyrothschildandco.com. This use case isn’t about a specific spending need – it’s about general liquidity management. Picture someone who’s heavily invested and living off a combination of income and some asset sales each year. If a bear market hits but expenses or new investment prospects arise, they can borrow against their portfolio to get through the slump, then repay when the market recovers – effectively smoothing out cash flow without locking in losses. It’s akin to an investor’s rainy-day fund, except it’s drawn from credit so your funds stay in play for the eventual sunny days.

5. Short-Term Bridge for Cashflow or Debt Consolidation:

Sometimes HNW individuals have plenty of assets but tight cashflow in a given moment – for instance, awaiting a large bonus, distribution, or sale completion. If a big payment is due (could be anything from a yacht purchase stage payment to a charitable pledge or an art auction win), Lombard lending can bridge the gap. It’s similar to how any bridge loan works but using your investment account. Another angle is consolidating or replacing costlier debt. If someone has, say, a mix of other loans – maybe a personal loan here, a margin loan on a brokerage account there – they might roll it all into a Lombard facility at a potentially lower interest rate and with one point of management. The key is that it’s short-term or transitory uses; you wouldn’t want to indefinitely carry a Lombard loan for routine expenses, but for interim needs it shines.

6. Enhancing Investment Returns (Leveraging Portfolio – with Caution):

This is a more aggressive use case and must be approached carefully. Some sophisticated investors use Lombard loans to leverage their investment portfolio further. Essentially, they borrow against part of their portfolio to invest more into the market. If the returns on the investment exceed the cost of the loan, they net a profit. For example, if one can borrow at 2% and believes they can earn 5% on a certain investment (after considering risk), they might use Lombard credit to augment their position. This is similar to a margin trading strategy. Private banks often discourage using Lombard loans purely to buy more of the same securities (particularly their own bank’s products, as noted before). However, some clients do use it to diversify – e.g., borrow against a bond portfolio to buy property, or borrow against equities to invest in a private venture. Essentially, it’s using leverage to potentially increase overall returns. The risk, of course, is magnified if markets move against you (and you then have interest to pay on top). This strategy should only be undertaken with full awareness of the risks, and many HNW clients actually prefer Lombard loans for the other reasons above (liquidity and flexibility) rather than raw leverage. Still, it’s a possible use case: a tool for careful, strategic leverage in a portfolio.

Each of these scenarios shows how Lombard lending supports broader wealth management goals. It’s not just about getting cash – it’s about doing so in a way that keeps your wealth working for you. Whether it’s keeping an investment portfolio intact during a property play, sidestepping a tax-triggering sale, or ensuring you don’t miss a golden opportunity due to temporary liquidity issues, Lombard loans can be the quiet hero in a HNW client’s financial plan. At Willow Private Finance, we’ve helped clients employ Lombard lending in all the ways above. Often, it’s about creativity: seeing that a need can be met by assets you already have. We work closely with clients’ wealth managers, tax advisers, and other professionals to ensure using a Lombard loan complements (and doesn’t conflict with) the overall strategy. The goal is always to support your financial objectives with minimal compromise – and Lombard lending, when used prudently, does exactly that by giving you cash today without derailing tomorrow’s plansrothschildandco.com.

Outlook for 2025 and Beyond

As we look beyond 2025, the role of Lombard lending in the HNW finance toolkit appears set to grow. Recent analyses suggest that securities-backed lending is a significant and expanding segment in private bankingprycewilliams.co.uk. Several factors point to a robust outlook:

• Continued Demand for Liquidity Management: High-net-worth individuals are likely to remain heavily invested in a variety of assets – from equities to alternative investments – as global wealth grows. With markets prone to cycles, the need to manage liquidity without divesting core holdings will persist. Lombard loans perfectly address this need, so as more people become aware of the facility, uptake should increase. In the UK especially, where many HNW families are involved in property, business, and investment concurrently, the ability to shuffle liquidity across these domains (using a portfolio to fund a property deal, for instance) will remain valuable.

• Private Banks Pushing the Product: From the bank’s perspective, Lombard lending is attractive: it’s low risk (fully collateralized), and it helps them deepen client relationships (they get AUM and interest income). We’re already seeing private banks marketing “portfolio lending” as a key service. For example, major institutions like UBS, Credit Suisse, Coutts, etc., all promote their versions of Lombard loans, often under names like “Investment Backed Lending” or “Portfolio Credit”. With competition among banks for HNW clients, offering flexible Lombard facilities can be a differentiator. This competitive dynamic could further improve terms for borrowers (perhaps lower rates or higher flexibility) as banks vie to win or retain top-tier clients. In short, expect Lombard lending to become even more mainstream in private banking offerings.

• Technology and Fintech Integration: The efficiency of Lombard lending might improve with fintech innovations. We could envision more automated monitoring systems, even client-facing dashboards where you can see your available credit against your portfolio in real time. Some fintech-oriented wealth managers might start offering Lombard-like credit lines in a more automated fashion for smaller HNW clients or mass affluent investors (though true Lombard loans will likely remain a HNW domain due to scale). If the process becomes more streamlined, it lowers friction and could broaden the user base.

• Regulatory Environment: Currently, Lombard loans are largely unregulated credit as they don’t fall under typical consumer credit or mortgage rules, especially when extended to HNW clients or for business purposes. There’s no indication of imminent regulation change in the UK for this niche. Regulators focus more on ensuring banks manage the risk (which they do via strict LTV and diversification rules internally). One thing to watch: any changes in bank capital requirements or risk models for securities lending could influence how much banks are willing to lend or at what cost. But given the strong performance of these loans (defaults are rare when managed conservatively), banks should have continued appetite.

• Economic Cycles and Lombard Usage: If interest rates in the UK begin to fall gradually after 2025 (as some forecasts suggest they might in 2026-2027 if inflation is tamed), the cost of Lombard borrowing would fall too, making it even more attractive to use. On the flip side, if there were another shock where central banks hike rates sharply, Lombard loans would become pricier to maintain, which could dampen demand slightly or encourage deleveraging. Nonetheless, because the primary driver is often not cost but strategic need (e.g., avoiding asset sales), even in higher rate environments, clients might use Lombard facilities, just more judiciously.

• Global Market Growth: Globally, Lombard lending is huge – some estimates put the global market at trillions of dollarsprycewilliams.co.uk. The UK is a significant slice of that, with growth in recent years fueled by greater awareness and the liquidity needs around events like the COVID-19 pandemic (some business owners pledged portfolios to raise cash when revenues dipped, etc.). The trend is upward. As one report noted, increased awareness and market conditions have driven substantial growth in equity-backed lending in the UK since 2019prycewilliams.co.uk. We anticipate this trajectory will continue as more private banks and advisors educate clients about using leverage strategically.

• Diversification of Collateral: We might see an expansion in what’s accepted as collateral. Already, some lenders are exploring lending against more esoteric holdings (for example, certain private equity fund stakes or even luxury assets like art through structured loans). While classic Lombard loans will stick to marketable securities, a close cousin is loans against fine art, classic cars, etc., which some private banks also offer to HNW clients. The idea of “lending against what you own” is proliferating. In 2025 and beyond, a holistic approach might be taken: a client’s investment portfolio plus perhaps their luxury assets together could back a flexible credit line. This is more speculative, but it points to the innovation in HNW lending products.

Overall, the outlook for Lombard lending is strong. It aligns with the core philosophy of many HNW clients: keep your money growing, but don’t let opportunities slip by for lack of cash. By supporting short-term liquidity needs and strategic financing moves (like property investments or tax planning) without compromising long-term investment positions, Lombard loans are likely to remain a cornerstone of sophisticated financial planning.

We also expect that clients will become more savvy in using these loans. The conversation is shifting from “What is a Lombard loan?” to “Here’s how I integrate my Lombard facility into my overall strategy”. Five years ago, relatively few outside the private banking world talked about this tool. Now, especially with firms like Willow Private Finance advising on it, more property investors, entrepreneurs, and family offices in the UK are actively incorporating securities-backed lending into their playbook. The bottom line: Lombard lending is here to stay, and its role is only growing in the HNW financial ecosystem.

How Willow Private Finance Can Help

At Willow Private Finance, we specialize in bridging the gap between our clients’ complex financial needs and the niche solutions the market can offer. Lombard lending is a prime example of where an independent, whole-of-market broker adds value. Here’s how we assist HNW clients considering or utilizing Lombard loans:

Whole-of-Market Access: Willow isn’t tied to any single bank or lender. We have relationships with dozens of private banks, wealth managers, and specialist lenders in the UK and internationally. Whether you’re a UK resident with a local portfolio or an international client with multi-currency assets, we know which institutions are active in Lombard lending for your profile. This whole-of-market approach means we can often secure terms that an individual investor might not obtain on their own. If one bank requires £5M AUM and you have only £3M, we might find another that’s happy with that. If one offers a rate of 3%, we might get a competing offer at 2.5%. We effectively shop around quietly on your behalf, without impacting your credit file or signaling anything to the market, and come back with the best options.

Expertise in Complex Cases: Many of our clients don’t fit neatly into a standard box – and we pride ourselves on that. Perhaps your wealth is tied up in an IPO lock-up (shares you can’t sell yet) but you need liquidity now. Or maybe you want to use a combination of collateral – say, your personal portfolio and an offshore trust’s portfolio together – to maximize a credit line. These scenarios can be too complex for a DIY approach or for mainstream brokers. Willow thrives on complexity. We speak the private banks’ language and can structure a proposal that makes sense to credit committees. Our team’s background spans private banking and wealth management, so we know the pitfalls to avoid and how to present your case in the best light.

Negotiation and Value-Add: Arranging a Lombard loan isn’t just about the headline rate. We negotiate the finer points: the LTV, the eligibility of certain securities, the flexibility of topping up or releasing collateral, fee waivers, and more. For example, if you have a significant holding in a particular stock that one bank would value at only 50%, we might negotiate with another to recognize 60% of it by providing additional context or showing historically low volatility of that stock. Or if a bank is insisting on an AUM commitment of £1M for a relatively modest loan, we can sometimes negotiate that down or get them comfortable with a shorter-term relationship (perhaps you only maintain assets there during the loan term). Our goal is to secure you the most favorable terms possible while making the process smooth.

Ongoing Support: Our role doesn’t end once the loan is in place. We continue to be your advisor and intermediary. If you need to adjust the facility – say increase it because a new opportunity has arisen, or partially release some collateral because you want to rebalance investments – we coordinate that with the lender. In volatile times, if margin calls threaten, we’re there to help strategize the response (maybe liaising with the bank to extend a cure period while you mobilize funds, for instance). Essentially, you have an expert partner in your corner, ensuring the Lombard loan remains a tool that works for you and never against you.

Integrated Solutions: Often, a Lombard loan is just one piece of a bigger puzzle. You might also be considering a property refinance, an investment in a new venture, or an international mortgage. Willow’s breadth of expertise means we can ensure all parts of your financing strategy are aligned. For example, we’ve helped clients use a Lombard loan as a short-term bridge and then transitioned them to a long-term mortgage subsequently – we handled both steps seamlessly. In another case, a client used a Lombard facility to inject cash into a business, and we later helped that business secure its own financing to repay the Lombard loan. By seeing the whole picture, we can time things correctly and avoid you paying a day more of interest than necessary on any product.

Confidentiality and Discretion: High-net-worth clients value privacy. When Willow brokers a deal, it’s done with utmost discretion. Banks know that when we introduce a client, it’s a serious engagement, and sensitive information is handled accordingly. You won’t have to shop around telling your story repeatedly; we do that legwork for you in a confidential manner.

In short, Willow Private Finance serves as your trusted advisor and advocate in the Lombard lending arena. We don’t just connect you to a lender – we guide you through the strategy, execution, and ongoing management of the loan. Our independence ensures our only goal is aligning the deal with your best interests. Many of our clients come to us with a general idea (“I hear I can borrow against my portfolio – is that possible?”) and we turn it into a concrete, actionable plan that adds tangible value to their financial lives. Lombard lending, when facilitated by Willow, becomes not just a loan, but a strategic advantage wielded with confidence and precision.

Frequently Asked Questions: Lombard Lending

What is Lombard lending and how does it work?
Lombard lending is a type of loan where you borrow against your investment portfolio (stocks, bonds, funds) without having to sell those assets. The bank holds your investments as collateral and lends you cash, typically up to a percentage of the portfolio’s value. You pay interest on the loan while your investments stay in place. It’s a way for high-net-worth individuals to unlock liquidity quickly – for example, to make a purchase or investment – while still staying invested in the market.

What assets can I use as collateral for a Lombard loan?
Generally, liquid and marketable securities are used as collateral. This includes publicly traded stocks, government and corporate bonds, mutual funds, ETFs, and sometimes cash-value life insurance policies. The assets should be easy to sell and not too volatile. Most private banks won’t accept things like real estate, private company shares, or cryptocurrency for a Lombard loan. The quality of the collateral will affect how much you can borrow – safer assets like government bonds can support higher loan-to-value ratios than risky stocks.

How much can I borrow against my investments (what is the typical LTV)?
It depends on the asset mix, but typically around 50-60% of the portfolio’s value is common. For example, a £10 million portfolio might secure a £5 million credit line. If your investments are very stable (like a portfolio of government bonds), some banks may lend more (up to 70-80% in select cases). If the assets are volatile or concentrated in one stock, the bank will be more conservative (maybe 40% or less). The exact loan-to-value (LTV) is decided by the lender’s risk team based on your asset quality and diversity.

What happens if my portfolio value drops – will I lose my investments?
If your portfolio’s value falls significantly, the loan-to-value will increase. If it goes beyond the agreed threshold, the lender may issue a margin call. That means they’ll ask you to either add more collateral (additional assets or cash) or partially repay the loan to reduce the balance. You usually get a short window to do this. If you don’t meet the margin call, the bank has the right to sell some of your pledged investments to bring the LTV back in line. So, while you won’t automatically “lose” all your investments, the bank can liquidate enough of them to cover the loan safety margin. It’s important to monitor your portfolio and keep some buffer to avoid forced sales at a bad time.

Are Lombard loans regulated and safe?
Lombard loans are generally not regulated by the FCA in the same way as residential mortgages or consumer loans, because they’re considered commercial arrangements and often used by HNW or sophisticated clients. That means you don’t have certain consumer protections. However, they are a long-established practice in private banking and, when used prudently, are a safe form of borrowing for those who understand the risks. The safety largely comes down to how well you manage the loan – maintaining sensible borrowing levels and being prepared to respond to margin calls. It’s wise to get professional advice (and most banks only offer Lombard facilities to experienced investors). Also, ensure you’re working with reputable, regulated banks. The process itself – pledging assets and drawing a loan – is straightforward and contractually clear. Just remember that because it’s not FCA-regulated, you must be extra diligent in understanding the terms and consequences.

Can I use a Lombard loan to buy property or for other investments?
Yes, absolutely – that’s a common use. Lombard lending is often used to finance property purchases (either as a short-term bridge or even alongside a mortgage) because it allows you to raise funds quickly for a deposit or even full purchase without liquidating investments. It’s also used for investing in businesses, paying tax bills, or any significant cash need. Essentially, once the loan is drawn, it’s cash in your bank account – you can deploy it as you wish (with the general expectation that it’s for legal, financially sound purposes). Many HNW clients use Lombard loans to seize time-sensitive opportunities, like buying an asset when it’s attractively priced or injecting capital into a venture. It provides a lot of flexibility. Just keep in mind, you’re still responsible for the loan and interest, so whatever you use the money for should have a clear plan for repayment (for example, refinancing with a longer-term loan or expecting a liquidity event). It’s wise not to use Lombard credit for extremely speculative bets; treat it as a strategic tool to complement your overall financial plan.

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