Using Lombard lending to maximise your wealth

What you need to know

Every so often there is an opportunity where you need to act – and fast.

However, even the wealthiest people can find it difficult to obtain finance that suits their circumstances. You may have complex financial circumstances, such as low or irregular income. In other cases, the bulk of your wealth could be tied up in investments, or the value of a business.

As a result, access to cash – and the ability to make significant purchases or other investments – can be surprisingly limited.

However, Lombard lending, also known as portfolio lending, offers a solution to wealthy borrowers struggling to access cash.

It enables you to borrow against the value of your portfolio while ensuring your wealth remains invested, where it can continue to generate returns over the long term. This allows you to leverage your portfolio and seize new business opportunities. It also helps you avoid selling when market conditions are less favourable.

What is Lombard lending?

The Lombardy region of Italy has been home to banking houses for centuries. Money lenders in the area brokered financial deals for the rich and wealthy as far back as the 13th century.¹

These banks offered loans against assets, and modern-day Lombard loans follow the same principle. Today banks offering Lombard loans use assets such as stocks and bonds as collateral against their loans.

These loans can be a fast and convenient way of financing large purchases, such as a classic car or a piece of fine art. It can also be used for private equity investments, gifting or loaning money to relatives, or funding the expansion of a business.

Lombard loans are often processed faster than other forms of financing since the value of the collateral is easily verifiable. This quick access to funds can be crucial for businesses, or individuals facing urgent liquidity needs or investment opportunities.

They are typically short-term which means borrowers are not tied into a long-term financial commitment when raising funds.

How can I take out a Lombard loan?

Most high street banks find unconventional financial profiles difficult to accommodate because their lending criteria are usually based on evidence of income.

Anyone who doesn't tick the right boxes may therefore struggle to access the money they need, when they need it. The slow pace of the approval process at traditional lenders can also mean missing out on exciting opportunities.

But wealth encompasses more than just income. It includes clients' portfolios, businesses, properties, and other assets, providing a comprehensive view of your overall financial standing.

At Rothschild & Co, we pride ourselves on having enduring relationships with our clients, which grants us intimate knowledge of your financial circumstances, long-term goals, and family objectives. With this understanding, we can offer Lombard loans swiftly and securely when they are most needed.

Whether you're looking to borrow as an individual or through a trust, family investment company or other corporate ownership structure, we can create a solution tailored to you.

Throughout the lending process, we provide a dedicated point of contact to cater to your needs. Please get in touch with us to discuss your specific requirements.

Citations

¹ The Oxford Dictionary of Phrase and Fable, 2005

^{Past performance is not a guide to future performance and nothing in this article constitutes advice. Although the information and data herein are obtained from sources believed to be reliable, no representation or warranty, expressed or implied, is or will be made and, save in the case of fraud, no responsibility or liability is or will be accepted by Rothschild & Co Wealth Management UK Limited as to or in relation to the fairness, accuracy or completeness of this document or the information forming the basis of this document or for any reliance placed on this document by any person whatsoever. In particular, no representation or warranty is given as to the achievement or reasonableness of any future projections, targets, estimates or forecasts contained in this document. Furthermore, all opinions and data used in this document are subject to change without prior notice.}