Securities Backed Lending: Unlock Your Investment Value Without Selling
Access substantial capital without disrupting your investment strategy.
Securities based lending lets you use your portfolio as collateral while your investments continue to grow.
At Bridging Finance London, we arrange bespoke lending solutions from £150,000 upwards through our network of 250+ specialist lenders.
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Quality service
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Lender Choice
Over 250 Banks, Hedge Funds, Family Offices & more.
Experience
Over 15 years of specialist finance broking.
Bespoke Lending
Finance tailored specifically to meet your needs.
What is Securities Based Lending?
Securities based lending allows you to borrow money by using your investment portfolio as collateral for the loan.
Instead of selling your shares, bonds, mutual funds, or ETFs, you can use them to support a loan or line of credit.
This means you maintain ownership of your investments, continue to benefit from any growth or income they generate, and potentially avoid triggering capital gains tax that would result from selling.
The minimum loan amount we arrange is £150,000, making this solution particularly suitable for investors with substantial portfolios. It is an excellent option for those with significant assets but complex income structures or international profiles.
For example, an investor with a £2 million portfolio of blue-chip stocks could secure a £1.2 million loan while keeping their long-term equity investments in place.
Having quick access to funds is one of the key advantages of securities backed lending. You’ll benefit from a flexible line of credit that puts you in control of when and how much you borrow.
The approval process focuses on your non-retirement investment portfolio rather than complex income assessments, making it remarkably straightforward compared to other types of financing.
You can use the capital for almost anything – from property purchases and business investments to creating additional liquidity or seizing time-sensitive opportunities.
How Does It Work?
The process of obtaining financing through securities backed lending is straightforward but requires expert guidance to ensure you secure the most favourable terms.
Here’s what you can expect when working with us.
The Application Process
Our securities backed lending process begins with a consultation to understand your financial needs and portfolio composition. We assess which securities can serve as collateral, with most lenders accepting publicly traded stocks, bonds, mutual funds, and ETFs.
We then match you with suitable lenders and negotiate terms on your behalf.
The approval process is reasonably fast as it focuses on your securities rather than your income or affordability. Once approved, funds are released after documentation and securities transfer, typically within 1-2 weeks depending on portfolio complexity and lender requirements.
Loan Structure Options
Securities-backed lending offers flexible borrowing structures including credit lines (draw funds as needed, paying interest only on amounts used) or lump sum loans (full amount upfront for specific purchases).
Most loans are structured on an interest-only basis with monthly or quarterly payments and principal repaid at term end.
Some lenders offer options to roll up interest until the end of the term. Loan terms typically range from 6 months to several years with extension possibilities, making them ideal for short-term financing needs or unexpected opportunities.
Managing Your Portfolio During the Loan Term
During your loan term, your investments are held in a custodian account, allowing the lender security while you maintain beneficial ownership. You’ll continue receiving dividends and interest payments and benefit from any appreciation in value.
For the most part your stock is ‘locked away’ so trading is not possible.
Some lenders may permit restricted portfolio management during the loan term, allowing you to sell and replace positions (subject to approval) so your investment strategy can adapt to changing market conditions.
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Why Smart Investors Leverage Their Securities
Securities backed loans offers several compelling advantages that make it an attractive option for investors seeking to access capital.
Keep Your Investments Working For You
One of the primary benefits of securities backed lending is that you don’t have to sell your investments to access their value. This means you maintain your market position and continue to benefit from any potential growth in your portfolio.
If you were to sell investments instead, you might miss out on market rallies or dividend payments.
You’d also potentially trigger capital gains tax, which could significantly reduce the value you extract from your portfolio. For instance, selling £500,000 of appreciated stocks might result in a tax bill of £100,000 or more, depending on your tax bracket and the gain involved.
Your investments continue working for you throughout the loan term, potentially growing in value or generating income. This can be particularly valuable in a rising market or when you hold investments that pay regular dividends or interest.
Quick Access to Substantial Capital
When compared to mortgages, securities based lending provides much faster access to funds. They are probably most similar in nature to bridging loans.
The approval process is streamlined because the focus is on the quality and value of the securities rather than affordability assessments.
You’ll need to provide less documentation than with conventional loans, as the securities themselves form the basis of the lending decision. This makes the process not only quicker but also less intrusive.
The speed of arrangement makes securities backed lending ideal for situations where timing is critical – such as property auctions, business opportunities with tight deadlines, or responding quickly to market conditions.
In many cases, funds can be available within days of approval, allowing you to move swiftly when it matters most.
Flexible Funding for Various Opportunities
Unlike some financing options that restrict how you can use the funds, securities backed lending offers remarkable flexibility.
You can use the capital for a wide range of purposes:
Property acquisition is a common use, whether you’re looking to add to your property portfolio, purchase a holiday home, or secure a primary residence.
The funds can serve as a deposit or even allow for a full cash purchase, giving you a stronger negotiating position.
Business funding is another popular application, whether you’re starting a new venture, expanding an existing business, or require working capital.
The flexibility of securities backed lending makes it well-suited to the dynamic needs of entrepreneurs and business owners.
Investment opportunities often arise unexpectedly, and having quick access to capital can make all the difference. Securities-backed lending allows you to diversify your portfolio or take advantage of time-sensitive investment options without disrupting your existing strategy.
Luxury purchases such as yachts, fine art, or high-end vehicles can also be financed, often at more competitive rates than specialist luxury asset finance.
What Types of Securities Can I Use?
Not all investments are suitable for securities backed lending. Lenders generally prefer highly liquid assets that can be easily valued and sold if necessary.
Publicly traded stocks on major exchanges like the London Stock Exchange, New York Stock Exchange, or NASDAQ are widely accepted.
Blue-chip companies with stable performance histories are particularly favoured.
Government bonds issued by stable economies (like UK Gilts or US Treasuries) and high-grade corporate bonds typically qualify for the most favourable loan-to-value ratios due to their relative stability.
Mutual funds and ETFs that invest in mainstream markets are also generally acceptable, particularly those with strong track records and substantial assets under management.
More specialised investments like hedge funds, private equity, or unlisted shares may be considered by some lenders but usually at lower loan-to-value ratios or with additional conditions.
Lenders will assess not just the type of securities but also the overall diversity of your portfolio.
A well-diversified portfolio spread across different asset classes, sectors, and geographies will usually secure better terms than a concentrated portfolio.
Crypto-backed loans!
Your Borrowing Capacity
The amount you can borrow through securities based lending is primarily determined by the loan-to-value (LTV) ratio offered by the lender.
This ratio varies based on several factors:
For highly liquid securities like major indices, blue-chip stocks, and government bonds, lenders might offer LTVs of 60%. More volatile or less liquid securities will typically have lower LTVs, perhaps 40-50%.
The diversity of your portfolio also affects how much you can borrow. A portfolio concentrated in a single stock or sector will usually command a lower LTV than a well-diversified portfolio.
Market conditions play a role and during periods of high market volatility, lenders might reduce their offered LTVs to protect against rapid price movements.
For example, if you have a well-diversified portfolio of blue-chip stocks and government bonds valued at £1 million, a lender might offer a 60% LTV, allowing you to borrow up to £600,000. With a more concentrated portfolio of the same value, the LTV might drop to 50%, reducing your borrowing capacity to £500,000.
Remember that the minimum loan size we arrange is £150,000, and there’s no standard upper limit – we’ve arranged securities backed loans into the millions for clients with substantial portfolios.
Market Fluctuations
As your portfolio value fluctuates with market movements, there are implications for your loan:
If your portfolio increases in value, you may have the option to access additional funds up to the agreed LTV ratio, though this would require lender approval.
However, if your portfolio decreases in value, the loan-to-value ratio will increase.
If it exceeds the agreed maximum LTV, you might face a “margin call” – a request from the lender to either provide additional collateral or repay part of the loan to bring the LTV back within acceptable limits.
A lot of lenders offer portfolio monitoring services that alert you if your LTV is approaching critical levels, giving you time to take action before a formal margin call is issued.
What Can The Loans Be Used For?
Securities backed lending can be particularly valuable in specific situations.
But in fact it’s so flexible that the money raised can be used for almost anything.
Here are just a few examples.
Cash Property Purchases Without Portfolio Disruption
Found the perfect property but your capital is tied up in investments? With securities based lending, you can make competitive cash offers while keeping your investment strategy intact. This gives you an edge in negotiations – cash buyers typically secure better prices and complete transactions faster.
One client used this approach to purchase a prime London property with multiple interested parties. By presenting as a cash buyer, they secured the property despite not having the highest offer.
For international purchases, securities backed lending offers a simpler solution than complex cross-border mortgages, especially when your portfolio is with an international custodian.
Seizing Business Opportunities
When business opportunities arise securities backed lending provides quick capital access without disrupting your investment strategies. Whether acquiring another business, investing in equipment, or funding expansion, this financing offers the speed needed to move confidently.
A technology sector client used securities backed lending to acquire a complementary business that unexpectedly came up for sale. The quick funding allowed them to complete the acquisition within three weeks, outpacing competitors still arranging traditional financing.
This approach also works well for managing seasonal cash flow needs or bridging gaps between investment rounds.
Property Finance for Complex Income Profiles
For those with complex income structures – entrepreneurs, business owners, or individuals with international income – traditional mortgage applications can be challenging.
Securities-backed lending focuses on your assets rather than income, making it ideal for high-net-worth individuals whose wealth is primarily in investments.
International buyers face particular hurdles with UK mortgages. Securities backed lending sidesteps these issues, providing a straightforward financing route.
For high-value transactions, it can offer competitive terms compared to jumbo mortgages, with flexible repayment options and potential tax benefits from maintaining your investment position.
The Bridging Finance London Advantage
When arranging specialised loans, working with the right broker can make all the difference in securing the most favourable terms and ensuring a smooth process.
With over two decades of experience in high-value finance, Bridging Finance London has developed unparalleled expertise in structuring these complex arrangements.
Our team understands both the investment landscape and the lending market, allowing us to create solutions that mainstream brokers often cannot envision.
Unrivalled Lender Network
We’ve developed relationships with more than 250 lenders who offer securities backed lending. This extensive network includes:
- Private banks who specialise in providing bespoke financial solutions for high-net-worth individuals. Many of these institutions have dedicated teams for securities backed lending and can offer some of the most competitive rates in the market.
- Specialist finance providers who focus exclusively on asset-backed lending. These lenders often have a deep understanding of different types of securities and can structure deals that mainstream lenders might not consider.
- Individual lenders from our network of high-net-worth individuals who lend their own money. These lenders can sometimes offer more flexible terms than institutional lenders, particularly for unique situations.
Our extensive network allows us to find the right lender for your specific circumstances, whether you have a straightforward requirement or a complex scenario that needs a tailored approach.
Bespoke Solutions
No two clients’ needs are exactly alike, which is why we pride ourselves on creating bespoke lending solutions. We’re particularly adept at handling complex scenarios such as:
- International portfolios held with multiple custodians across different jurisdictions. We understand the additional complexities this can create and work with lenders who have the expertise to navigate these arrangements.
- Multi-currency considerations are important when your investment portfolio contains assets denominated in different currencies than the loan you’re seeking. We can help structure arrangements that minimise currency risk.
- Bespoke structures might be necessary when standard lending approaches don’t fit your needs. We’ve arranged complex securities backed lending solutions involving multiple lenders, tiered security arrangements, and creative exit strategies.
Our experience with high-value, complex transactions means we can work through challenges that might seem insurmountable with mainstream lenders.
Specialist Knowledge
Securities backed lending involves nuanced considerations that require specialist knowledge. Our team provides expert guidance every step of the way:
- Our broker team has over 30 years of combined experience in securities backed lending and stays current with market developments and lender criteria. This expertise allows us to give you accurate, up-to-date advice.
- We can coordinate with your wealth management team, ensuring that your securities backed lending arrangement aligns with your broader financial strategy. This collaborative approach helps maintain a coherent wealth management plan.
- Our support continues beyond the initial arrangement of your facility. We provide ongoing advice on managing your lending facility, responding to market changes, and planning for renewal or repayment at the end of the term.
- We take a holistic view of your financial situation, ensuring that securities backed lending fits appropriately within your overall strategy rather than considering it in isolation.
Take the First Step
Arranging securities backed lending with Bridging Finance London is straightforward and efficient. Begin with a no-obligation consultation where we’ll discuss your financing needs and how your investment portfolio could work as collateral.
Have your basic portfolio information ready – including types of securities, approximate values, and where they’re held. Once we confirm securities backed lending is right for you, we’ll search our network of lenders to find your optimal solution.
We handle everything from lender negotiations and paperwork to coordinating with your existing advisers, ensuring a smooth, stress-free process throughout.
Contact us today to explore how securities backed lending could help you access capital while keeping your investment strategy intact.
Call 020 3951 2828 to arrange an initial consultation.
