Key Facts:
- Client: UK Client
- Loan Amount: £1,300,000
- Security Value: £1,857,000
- LTV: 70%
- Interest Rate: 2.20%
- Security: US Listed Stock
Lombard lending is a relatively short-term form of borrowing with terms ranging from as little as one week up to 24 months. Financial institutions will usually offer lombard loans as a percentage of the value of the securities held by the borrower. As with standard mortgages, Lombard Loans are offered by banks and financial institutions and come with favourable interest rates but, instead of a property, the debt is secured against investments.
In this case, we were approached by a UK based client who needed funds for a tax bill in April. We helped the client secure a lock-in option to benefit from the low rates in January before the interest rate increase in April. We secured a 70% LTV (loan-to-value) non-recourse finance facility with the flexibility to drawdown funds as and when needed.
As this case illustrates, lombard loans are particularly advantageous because it’s possible to receive your credit line relatively quickly. Comparatively, the underwriting process on something like a mortgage can take a while (because the lender needs to value the property). However, the underwriting process for a Llombard loan is much more straightforward because underwriting is usually limited to the collateral used as security for the loan. It’s this very efficient underwriting process that makes receiving capital so quick. In some cases, you might have access to your credit line in as little as 24 hours or a matter of a few days.
That said, knowing which lenders to approach, how to present your situation and how to settle an advantageous deal is critical. With access to the right lenders and a track record of securing Lombard loans against various types of security, Enness is ideally positioned to help you get the best deal. To discuss your scenario, get in touch today.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
