For years, securities-backed lending (SBL) and Lombard lending were treated as exclusive private banking products reserved for ultra-high-net-worth individuals.
If you did not have a £1 million, £5 million, or even £10 million investment portfolio, most banks simply were not interested.
The market operated behind the walls of private banks, with restrictive minimum asset requirements, mandatory custody transfers, slow onboarding, and complex relationship structures that excluded a huge portion of otherwise financially strong clients.
That is now changing, and the implications for the UK lending market are significant.
At Willow Private Finance, we are now seeing lenders and specialist financiers actively entering a part of the market that has historically been underserved: clients with investment portfolios from around £150,000 who require loans from approximately £65,000 upwards.
More importantly, some facilities can now be arranged without requiring the investment portfolio to be transferred into the lender’s custody.
That changes the market completely.
For the first time, a much wider group of professionals, business owners, property investors, company directors, and affluent individuals may be able to access liquidity against their investments without selling their assets, disrupting their investment strategy, or moving away from their existing adviser.
This is no longer just a niche private banking conversation.
It is becoming a mainstream liquidity strategy.
What Is Securities-Backed Lending?
Securities-backed lending allows a client to borrow money using their investment portfolio as collateral.
Instead of selling investments to raise cash, the client retains ownership of the portfolio while unlocking liquidity against it.
Eligible assets commonly include:
- Investment funds
- Listed equities
- Bonds
- ISAs
- Diversified managed portfolios
- Certain discretionary wealth management accounts
The lender assesses the quality, diversification, liquidity, and volatility of the assets before determining how much can be borrowed against them.
Depending on the portfolio composition, clients may be able to borrow a significant percentage of the underlying value while continuing to benefit from long-term market exposure.
This is one of the reasons Lombard lending has become increasingly attractive among sophisticated borrowers seeking liquidity without disrupting wealth structures.
Historically, however, most lenders imposed major barriers to entry.
Why Smaller Portfolio Lending Is Such a Major Development
The traditional private banking model was built around economics that only worked for very large clients.
Banks often wanted:
- Multi-million-pound portfolios
- Full custody transfer
- Wealth management mandates
- Long-term banking relationships
- Significant annual fee generation
Clients with £200,000, £300,000, or £500,000 invested frequently fell into an awkward gap within the market.
Too wealthy for traditional unsecured lending.
Too “small” for many private banks.
That gap is now beginning to close.
The emergence of lenders willing to consider:
- Portfolios from £150k
- Loan sizes from around £65k
- Non-custodied investment structures
It creates an entirely new lending category within the UK market.
This is particularly important because many financially strong individuals hold substantial wealth inside investments but remain relatively illiquid in day-to-day financial planning.
The ability to leverage those investments strategically, without liquidating them, can create significant flexibility.
Why Non-Custodied Lending Could Transform the Market
One of the biggest frustrations with traditional Lombard lending has always been custody.
Historically, lenders often required clients to transfer their portfolio onto the bank’s own investment platform before any borrowing could be considered.
For many clients, this created major resistance.
It often meant:
- Leaving a trusted wealth manager
- Disrupting long-term investment structures
- Rebuilding investment relationships
- Triggering administrative complexity
- Potentially creating tax or platform complications
In practice, many clients simply chose not to proceed.
The ability to arrange lending while the portfolio remains with the client’s existing investment manager or platform is therefore extremely important.
Psychologically, it changes the transaction from:
“You must move your wealth to access lending”
to:
“You can leverage your existing investments without restructuring your financial world.”
That is a huge difference.
It lowers friction dramatically and potentially opens the market to a far wider audience than traditional private banking has historically served.
Why This Matters in the Current Economic Environment
The timing of this market shift is important.
Many borrowers today are facing competing financial pressures:
- Higher interest rates
- Reduced mortgage affordability
- Tighter underwriting
- Increased taxation
- Liquidity pressure inside businesses
- Property investment opportunities requiring fast capital
At the same time, a growing number of individuals hold substantial investment portfolios accumulated through:
- Business exits
- Long-term investing
- Inheritance
- Property sales
- Pension planning
- Corporate earnings
Historically, those investments were often viewed as “untouchable” unless the client wanted to sell assets.
That mindset is changing.
Increasingly, sophisticated borrowers are recognising that investment portfolios can function as strategic balance sheet assets rather than passive holdings.
This is particularly relevant in a market where flexibility and speed have become increasingly valuable.
Who Could Benefit from Smaller Securities-Backed Loans?
The opportunity here extends far beyond traditional private banking clients.
In reality, this type of lending may now become highly relevant for a broad section of the affluent UK market.
Business Owners and Entrepreneurs
Many business owners accumulate wealth inside investment accounts while simultaneously facing short-term liquidity demands within their companies.
Rather than liquidating investments or using expensive unsecured borrowing, securities-backed facilities may offer a more efficient funding route.
This can be particularly useful for:
- Tax liabilities
- Working capital
- Acquisitions
- Growth funding
- Temporary cash flow requirements
Property Investors
Property investors frequently require fast liquidity for:
- Deposits
- Auction purchases
- Refurbishment projects
- Bridging gaps between transactions
- Time-sensitive opportunities
Selling investments to raise capital may create delays, tax consequences, or unwanted disruption to long-term portfolio growth.
SBL facilities can provide an alternative source of liquidity while preserving investment exposure.
Professionals with Accumulated Wealth
Doctors, lawyers, consultants, executives, and senior professionals often build meaningful investment portfolios over time but may still face conventional affordability constraints through mainstream lenders.
Securities-backed lending can create additional flexibility where traditional underwriting models fail to fully reflect overall financial strength.
Clients Seeking Tax-Efficient Liquidity
One of the most overlooked benefits of Lombard lending is the ability to avoid unnecessary asset disposals.
Selling investments can trigger:
- Capital gains tax
- Loss of future market upside
- Dividend disruption
- Poor timing during volatile markets
Borrowing against investments instead of selling them may allow clients to maintain long-term investment strategies while still accessing capital.
The Strategic Shift: From “Emergency Lending” to Wealth Structuring
Historically, many borrowers viewed lending as reactive.
Today, affluent clients increasingly view borrowing as a strategic wealth management tool.
That distinction matters.
Sophisticated borrowers are no longer simply asking:
“How do I raise cash?”
They are increasingly asking:
“How do I preserve assets while accessing liquidity efficiently?”
That is a fundamentally different conversation.
Securities-backed lending sits directly within that shift.
It allows clients to potentially:
- Preserve long-term investment growth
- Avoid forced asset sales
- Access liquidity quickly
- Create leverage strategically
- Improve overall balance sheet flexibility
This is one of the reasons the market is expanding beyond traditional private banking circles.
The Risks Still Matter
While the opportunity is substantial, securities-backed lending is not suitable for every client and should never be approached casually.
The underlying investment portfolio remains exposed to market volatility.
If portfolio values fall materially, lenders may require:
- Additional collateral
- Partial repayment
- Asset sales
This is commonly referred to as a margin call.
The structure of the portfolio itself is also critical.
Highly concentrated positions, illiquid assets, speculative holdings, or volatile investments may reduce borrowing capacity or increase risk significantly.
Interest rate exposure must also be considered carefully, particularly because many facilities are variable-rate products.
As with any leverage strategy, proper structuring and risk management are essential.
Why the UK Market Could Be at the Beginning of a Major Shift
The UK lending market has historically separated borrowers into rigid categories:
- Retail lending
- Commercial banking
- Private banking
But the “mass affluent” segment between mainstream retail clients and ultra-high-net-worth private banking clients has often been underserved.
That gap is now becoming increasingly visible.
There are thousands of individuals across the UK with:
- £150k–£1m invested
- Strong income
- Valuable assets
- Business ownership
- Property portfolios
- International wealth exposure
Yet many still lack access to the type of liquidity solutions traditionally reserved for much larger clients.
That imbalance is beginning to change.
As more lenders enter the lower-entry securities-backed lending space, the market could expand rapidly over the next few years.
Why Advice Matters More Than Ever
This is not a standardised lending product.
Every lender approaches securities-backed lending differently.
The outcome can vary significantly depending on:
- Portfolio composition
- Asset concentration
- Currency exposure
- Jurisdiction
- Loan purpose
- Risk appetite
- Investment platform
- Custody structure
The difference between a strong structure and a poor one can materially affect:
- Loan flexibility
- Margin call exposure
- Pricing
- Asset eligibility
- Overall risk
That is why proper structuring and lender selection matter enormously.
The Future of Lombard Lending Is Expanding Beyond Private Banks
For years, many clients assumed their investment portfolio was “too small” for securities-backed borrowing.
That assumption is becoming outdated.
The emergence of lower-entry, non-custodied lending structures could fundamentally reshape access to liquidity within the UK wealth market.
For many clients, this may become one of the most flexible forms of borrowing available, particularly for those seeking to preserve investments while accessing capital strategically.
The market is evolving quickly.
And for borrowers who understand how to use these structures properly, the opportunity may be substantial.
Frequently Asked Questions
Can I get a securities-backed loan with an investment portfolio worth £150,000?
Potentially, yes. While traditional Lombard lending was typically reserved for clients with portfolios of £1 million or more, parts of the market are evolving. Some lenders are now prepared to consider investment portfolios from around £150,000, with loan facilities starting from approximately £65,000, subject to the quality, diversification and liquidity of the assets.
Do I have to transfer my investment portfolio to the lender?
Not always. Historically, most securities-backed lending required clients to move their investments into the lender's custody before borrowing could be arranged. However, some newer lending solutions may allow you to borrow while your portfolio remains with your existing wealth manager or investment platform, reducing disruption to your long-term investment strategy.
What types of investments can be used as security for a securities-backed loan?
Eligible investments typically include listed shares, bonds, investment funds, exchange-traded funds (ETFs), ISAs, diversified managed portfolios and certain discretionary wealth management accounts. Each lender has its own eligibility criteria, and the overall composition of the portfolio is often more important than any single holding.
How much can I borrow against my investment portfolio?
The amount you can borrow depends on several factors, including the value of the portfolio, the types of investments held, diversification, volatility and liquidity. Lenders will assess the portfolio carefully before determining an appropriate loan-to-value ratio, meaning borrowing capacity varies between clients.
What can securities-backed lending be used for?
Securities-backed lending is highly flexible and may be used for a wide range of legitimate purposes, including property purchases, auction deposits, business investment, working capital, tax liabilities, acquisitions, education costs or other significant expenditure. Individual lenders may place restrictions on certain uses, so advice is important.
Is securities-backed lending suitable for property investors?
It can be an attractive option for property investors who need fast access to capital without selling investments. Funds may be used for deposits, refurbishments, bridging finance, development opportunities or other time-sensitive transactions, allowing investors to retain exposure to their investment portfolio while accessing liquidity.
What happens if the value of my investment portfolio falls?
If the value of the pledged investments declines significantly, the lender may require additional security, partial repayment of the loan or, in some cases, the sale of investments. This is commonly known as a margin call. Understanding this risk is essential before entering into any securities-backed lending arrangement.
Can business owners use securities-backed lending instead of unsecured borrowing?
In many cases, yes. Business owners who have accumulated personal investment portfolios may use securities-backed lending to raise liquidity for working capital, acquisitions, tax payments or business expansion, potentially avoiding the need to sell investments or rely on more expensive unsecured finance. Suitability will depend on individual circumstances and lender criteria.
Why is lender selection so important with Lombard lending?
Securities-backed lending is not a standardised product. Each lender has its own approach to eligible assets, loan-to-value ratios, pricing, custody requirements, currencies and risk management. Careful lender selection can significantly influence borrowing flexibility, interest costs and the overall suitability of the facility.
How is securities-backed lending different from a traditional personal loan?
Unlike a personal loan, securities-backed lending is secured against an investment portfolio rather than relying solely on income and credit assessment. This means borrowing capacity is influenced by the quality and value of your investments, making it a useful solution for affluent individuals who are asset rich but prefer not to liquidate their portfolios.
Enquire About Securities-Backed Lending
If you hold an investment portfolio and would like to explore whether securities-backed lending or Lombard lending could help you raise capital without selling your investments, Willow Private Finance can assess your circumstances and introduce suitable lenders where appropriate. We provide independent guidance on facility structures, portfolio eligibility and lender selection to help you access liquidity while supporting your long-term financial objectives.
