Seize the moment with Lombard loans

Sometimes an investment opportunity comes up that’s too good to miss. By borrowing against your liquid assets, you can have the flexibility to diversify your portfolio when needed without having to sell any of your existing assets or investments or disrupt your long-term plans.

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Right for you?

Open up a range of financial opportunities, retain ownership of your investments:

A Lombard loan is borrowing secured against an investment portfolio. One of the key advantages is that you are able to retain your ownership and authority over your portfolio. Other benefits include:

  • Tailor a loan to your specific requirements
  • Competitive interest rates
  • Easier and cheaper to set up than using property as security
  • No need for a surveyor’s valuation or conveyancing fees (a building survey is still recommended)
  • Swifter and more cost-effective approach than a bridging loan
  • Where used for the purchase of rental property, tax benefits may apply
  • All costs clearly defined at the outset

Available from a minimum of £250,000 (or currency equivalent).

When they can help

What can Lombard loans be used for?

  • When timescales are crucial

    For unforeseen events that requires immediate access to cash, a Lombard loan can help even if the loan will be paid down relatively quickly, such as through the receipt of an insurance claim or bonus.

  • Helping your family

    From diversifying an investment portfolio to being used for an entrepreneur’s business needs, the uses are wide and varied. Lombard loans can enable parents to loan or gift to their children, to help them buy a home, for example, without needing to sell their investments. They can also help during a family emergency.

    Our high-net-worth clients have also used them to fund the purchase of homes where it is difficult or expensive to get finance on the property itself.

Investment options

What investments can back these loans?

These loans are available against diversified, high-quality portfolios which include ‘liquid’ investments that are priced and traded on a daily basis. Investors can borrow against both discretionary investment management services and execution-only investment portfolios held with a bank.

  • Are non-diversified investments suitable?

    We can also lend against non-diversified portfolios, for example, against a single blue-chip holding that a private client might have, with share options accumulated during their employment. While this is not Lombard lending per se, it can provide a client with liquidity for many purposes, including to diversify their holdings and build a portfolio.

  • Are there any restrictions?

    There are some restrictions on the type of investments clients may use as security. For example, Alternative Investment Market (AIM) stocks, which can be more volatile, are not acceptable.

Frequently asked questions

Nedbank Private Wealth

What currencies are Lombard loans available in?

Loans can be in sterling, euros or US dollars.

Are Lombard loans only available to individuals?

Loans can be secured in your name, or via a company or trust.

How much will it cost?

This depends on a range of factors so please get in touch with your adviser to discuss your individual requirements.

How much can I borrow?

We typically lend up to 50% of the current market value of a diversified portfolio.
Flexible options

Combining Lombard loans and property finance

While a Lombard loan can be much easier and cheaper to set up than one using property as security, our private clients often take out both.

A Lombard loan avoids the need for a valuation from a, surveyor, as well as conveyancing fees. Although we would encourage all buyers to have a building survey carried out when buying any property. Lombard lending is invariably swifter and more cost-effective than a bridging loan.

They can also be used to fund renovations that will increase a property’s future value, but where this uplift isn’t reflected in the current valuation and is limiting the level of borrowing achievable against the property itself.

Where a loan is being used primarily to purchase a rental property, it may be possible to claim tax relief on some or all of the interest applied on the loan.

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Risks to bear in mind

What if my underlying assets fall in value?

You should always keep the risks in mind, particularly when using the proceeds to buy additional investments (whether these are shares, funds or physical property). While it might not be envisaged at the outset that a diversified portfolio would fall significantly in value, it can and does happen from time to time.

Anyone looking to borrow should be aware of the risks of this happening, and only borrow if they are comfortable with these. This might mean either applying for a smaller loan to allow greater ‘headroom’, having additional assets in place to be able to reduce the loan, or providing additional collateral, or a combination of these.

Important considerations

What other risks are there?

It is worth bearing in mind the impact of any taxes on your investment which could include income tax on dividends, capital gains and inheritance tax. Professional advice should be sought on how these may impact your individual circumstances.

It is also important to ensure you have sufficient income to service the loan, this is particularly pertinent in a world of falling investment returns, dividends, and property yields.

Discuss lending options in advance with our professional advisers, including your private banker. Taking a proactive approach will give you to consider the options available to you and find the best, most efficient and suitable way forward.

Related case studies

Read about more clients we have helped

We have helped countless clients with their financial needs – some straightforward, some complex. Our bespoke approach, where we really get to know our clients, allows us to offer solutions that other wealth planners and private banks aren’t able to.

Do you have any questions?

Get in touch for more information. Call +44 (0)207 002 3600 or email [email protected]

Find out more about our teams in the UK, Isle of Man, Jersey and Dubai here

Frequently asked questions

Nedbank Private Wealth

Can I borrow against other assets e.g. art?

These require asset-backed lending facilities which is a specialist form of financing that we currently don't provide.

Can you borrow against ISAs and personal pensions?

It's not possible to borrow against ISAs or pensions for regulatory reasons.