Lombard lending is a suitable route for clients who are cash rich, but have limited or no income. This could be for a variety of reasons. If you have recently sold your business, or have chosen to take time out from work, you may well be cash rich but not be able to demonstrate any significant income. If you have inherited a large cash sum, you may be in a similar position.
This can make it particularly difficult to secure a mortgage. A Lombard loan could therefore be a solution. Instead of being secured against a property, a Lombard loan is secured by readily marketable assets such as shares and commodities. They could even be secured against assets such as gold or copper.
Lombard loans are generally offered at a desirable interest rates. As Lombard loans are offered by private lenders, there will generally be a minimum loan size requirement in the region of £1million.
How can Enness help with Lombard lending?
This is something we can confidently arrange for you. For example, I recently assisted a client who had sold his business for a large sum of money. A proportion of this had been paid to him already, with the rest being released over the next 18 months. Despite his evident wealth, he was now ‘unemployed’ or would be classed as such by a bank.
My client hoped to purchase a home in the UK for just over £3million. He was able to pay cash, but wished to maintain his liquidity by taking out a mortgage. However, high street banks were unwilling to work with him as he couldn’t provide three months of payslips.
Fortunately, I was able to convince a lender to take a view of his situation and offer him a Lombard loan. This meant he was able to place a certain amount of his wealth with the bank, and they would lend him 70% of this. Meanwhile, the funds would be earning a healthy return, subject to his risk profile. He was therefore able to borrow with the loan secured against his cash assets, at a very low rate of 1.25%.