Securities Backed Lending (SBL) has emerged as one of the most versatile financial tools for high-net-worth individuals in 2025. By pledging equities, bonds, or funds as collateral, clients can unlock liquidity without selling assets, preserving long-term investment strategies while meeting short-term capital needs. Increasingly, SBL is being used for property purchases, development projects, and wealth planning.

But where should clients source these facilities? The two main options are private banks and specialist lenders. While both offer SBL, their approach, pricing, flexibility, and suitability vary significantly. Understanding the differences is essential for clients seeking to secure liquidity quickly, discreetly, and on competitive terms.

This article explores how private banks and specialist lenders approach securities backed lending in 2025, the advantages and limitations of each, and how borrowers can decide which route works best for their circumstances.

The Role of Private Banks in Securities Backed Lending

Private banks have long been the primary providers of SBL. For wealthy clients with existing banking relationships, these institutions often view SBL as a core service. Facilities are offered not only as standalone solutions but also as part of a broader wealth management relationship.

The main strength of private banks lies in their integration. Clients who already hold portfolios with them may find SBL facilities arranged seamlessly. The bank has visibility over the portfolio, understands its liquidity, and can structure terms quickly. For high-net-worth individuals purchasing prime property — such as those detailed in Willow’s blog on large mortgage loans — this ability to deliver certainty of funds in days can be decisive.

Private banks also tend to offer competitive interest rates, particularly where the facility is viewed as part of a long-term client relationship. A borrower who maintains their wealth with the institution may secure preferential pricing, sometimes below what specialist lenders will offer.

However, private banks are not always the most flexible. Many prefer standardised structures and may restrict the use of proceeds. Some will only lend if portfolios are custodied with them, which may require clients to transfer assets. And while they can be fast, their processes still involve internal committees and approvals, which may not suit ultra-time-sensitive deals.

The Rise of Specialist Lenders

Specialist lenders have grown rapidly in the SBL space, particularly in the last five years. These institutions, often boutique finance providers or alternative investment firms, have identified a gap where private banks are too restrictive.

Their main appeal lies in flexibility. Unlike private banks, many specialist lenders are willing to accept a broader range of securities, sometimes including concentrated positions or more volatile holdings. They are also less likely to impose restrictions on the use of funds. For a developer looking to cover pre-planning costs, or an international buyer arranging a fast purchase, this flexibility can be critical.

Speed is another factor. Specialist lenders are often leaner in structure, able to approve facilities without the layers of committee oversight common in banks. This can result in facilities arranged within a week — a crucial advantage in a competitive property market, as seen with bridging finance.

The trade-off is usually cost. Specialist lenders tend to price higher than private banks, reflecting both the flexibility they provide and the risks they assume. While a private bank may offer SBL at rates close to base lending, specialist lenders may add a premium of several percentage points. For many clients, however, the additional cost is justified by speed and accessibility.

Comparing the Two Models

When weighing private banks against specialist lenders, several key differences emerge. Private banks are best positioned for clients with existing relationships, diversified portfolios, and time to navigate internal processes. Specialist lenders excel for clients who need immediate liquidity, have complex or unconventional portfolios, or want flexibility in how proceeds are used.

For example, an ultra-high-net-worth family office with a long-standing relationship at a Swiss private bank may find SBL there both cost-effective and straightforward. By contrast, a developer identifying a site with a two-week exchange deadline may prefer a specialist lender who can release funds against their securities without requiring asset transfers.

Both models have their place. The key is aligning the choice of provider with the borrower’s specific objectives, timeframes, and portfolio characteristics.

Case Studies: Private Bank vs. Specialist Lender

Take the case of an international investor with a $30 million portfolio managed by a global private bank. They wish to acquire a £10 million London property. Because the assets are already custodied with the bank, an SBL facility of £6 million is arranged within days at highly competitive pricing. The client benefits from speed, integration, and cost efficiency.

Contrast this with a UK-based developer holding a £12 million portfolio across several platforms, including more concentrated technology equities. They identify a site requiring immediate funds. The private bank is unwilling to lend against the concentrated portfolio. A specialist lender, however, agrees to advance £5 million, secured against the available assets, within 10 days. The pricing is higher, but the speed and flexibility allow the developer to secure the deal.

These examples illustrate that the “best” lender is not universal. It depends entirely on the borrower’s circumstances.

Risks to Consider with Each Approach

Borrowers should also consider the risks attached to each provider type. With private banks, the main risk lies in restrictions. Facilities may be tied to broader banking relationships, limiting client flexibility. In some cases, borrowers may need to consolidate assets with the bank, which could conflict with independent wealth management strategies.

With specialist lenders, the risk lies in cost and structure. Higher pricing can erode returns, and borrowers must be careful to assess facility terms. Repayment obligations, margin call procedures, and eligible collateral lists can vary widely across providers. Clients need to understand exactly what they are agreeing to, particularly in volatile markets where margin calls can occur suddenly.

The 2025 Landscape

In 2025, both private banks and specialist lenders are expanding their presence in the SBL market. Private banks are promoting SBL more actively as part of their wealth offering, while specialist lenders are capitalising on demand for faster, more flexible facilities.

Family offices and international investors are increasingly blending both approaches, maintaining private bank facilities for cost-effective long-term liquidity, while turning to specialist lenders when deals require immediate execution. Developers, in particular, are using specialist lenders to cover acquisition deposits and planning fees, then refinancing into private bank or structured development finance once projects mature.

How Willow Can Help

At Willow Private Finance, we sit at the intersection of these two worlds. We work with leading private banks across the UK, Europe, and further afield, ensuring clients access preferential rates and integrated solutions. At the same time, we maintain relationships with specialist lenders able to provide rapid, flexible facilities for clients who need immediate liquidity.

Our role is to match the client with the right solution. For some, this means leveraging an existing banking relationship to secure a cost-effective facility. For others, it means turning to a specialist lender who can deliver speed and flexibility when banks cannot. In every case, our focus is on structuring solutions that align with broader wealth and property objectives, minimising risk and maximising opportunity.

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