The true power of Lombard lending lies in its versatility. For high net worth individuals and affluent investors, it provides a flexible means of accessing liquidity for a variety of purposes while allowing portfolios to remain fully invested.
Here we discuss the varied use cases for Lombard lending that investors may want to discus with their wealth manager as part of a holistic approach to financial planning.
Lombard Lending for Real Estate
One of the most common scenarios where Lombard lending is used is property finance.
Clients often find themselves in a chain when buying or selling property. These delays can jeopardise opportunities, not to mention the stress and uncertainty they cause. By using Lombard Credit as a bridging loan, they can secure a new property quickly while awaiting sale proceeds, with the loan proving a sizeable deposit or even the full purchase price, to be repaid when the first property is sold.
Because interest rates on secured facilities are generally lower than standard bridging loans, the solution is often more cost-effective, not to mention much quicker!
Bridging loans are not the only use case when it comes to Lombard loans for real estate.
From holiday homes in the Cotswolds to flats in London for adult children, second homes can also often require quick access to a large deposit or benefit from a cash purchase. By leveraging portfolios, investors can secure a second house mortgage or agreed sale without selling down investments.
Lombard Lending for Business
Entrepreneurs and business owners also find value in portfolio lending. It can provide short-term liquidity to fund ventures, cover cash flow gaps, or seize growth opportunities without requiring them to exit investments prematurely.
For those seeking a small business loan or start-up loan, Lombard lending provides an alternative to commercial borrowing. Entrepreneurs can access business funding quickly, using their portfolios as collateral, without diluting equity in their businesses.
Lombard Lending for Family Wealth Planning
Inheritance tax planning involves careful consideration of timing.
By using Lombard facilities, families can gift assets or liquidity while maintaining their own investment positions, supporting intergenerational wealth transfer without impacting long-term portfolio growth strategies or needing to sell significant proportions of an soon-to-be inherited investment portfolio meaning growth can be maintained for the benefit of the next generation. Used in this way, Lombard loans are effectively reinventing the modern “Bank of Mum and Dad.”
Lombard lending for Tax Planning
Tax planning provides another strong use case. By borrowing rather than selling, investors defer or avoid Capital Gains Tax and can plan disposals across multiple tax years.
Similarly, investors facing large tax bills, such as following a bonus, business sale, or property disposal, can borrow temporarily against their portfolios to meet obligations efficiently.
Lombard Lending for Short-term loans
Life doesn’t always comply with an investors long-term investment strategy and situations arise where liquidity is required ahead of anticipated inflows.
Clients awaiting a bonus, tax rebate, or proceeds from a business exit can use Lombard loans to bridge the gap, ensuring financial commitments are met without selling investments under pressure.
Funds may also be needed to pay for major life events, such as weddings, or to enable you to plan that once-in-a-lifetime holiday or purchase of your dream car. Lombard lending offers credit with repayment only due via the interest incurred on the amount of the loan that’s been utilised, essentially providing an alternative line of credit.
At the highest level, strategic leverage is another option. Some sophisticated clients use portfolio lending to conservatively amplify exposure to markets in favourable conditions.
In all these scenarios, the underlying theme is flexibility without compromise. By enabling liquidity while portfolios remain invested, Lombard lending offers a unique combination of immediacy, efficiency, and long-term wealth preservation.
To find out more about use cases for Lombard lending, you can download our fully comprehensive whitepaper here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Wealth managers must seek appropriate regulatory permissions before introducing or advising on Lombard lending solutions.
