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As service providers who handle the structures that hold and optimise a HNWI’s wealth, corporate services providers and trustees usually have complete oversight of a client’s capital flows, income and assets. This means you are often a natural first port of call for your clients when they need to raise debt.
Most corporate service providers and trustees know enough about debt to have a go at raising finance for clients themselves. However, if you can’t secure a loan, have a limited lender network or don’t know how to get the best deal for your client, raising finance can get complicated very quickly. This is totally normal because you operate in your own sphere of expertise, and debt will often fall outside of this.
However, just like every other part of the HNWI ecosystem, there are real advantages in outsourcing to an expert like Enness that can explain, advise and troubleshoot for you and your client, alongside the actual finance broking. Here’s an overview of what corporate service providers and trustees should know about raising debt:
The most common assumption is that debt is about finance, but that’s only half the story. Debt is usually about your client’s ability to achieve something, solve a problem, make something happen or buy something. Additionally, raising finance is also fiscally advantageous.
There are an unsurmountable number of lending products on the market, and it is impossible for anyone without debt knowledge to know all of them or what will be the best fit for your client. It’s easy to say, ‘My client wants to buy a house, so we’ll get them a mortgage,’ but debt, executed to its full potential, needs to be approached more broadly. To this end, our approach is always client and outcome-first, rather than product-first.
We don’t look at lending products before we have understood what it is your client wants to achieve and their assets. Sometimes, it’s not the most obvious financing product that fits your client best. In many cases, raising finance differently or using an alternative type of security will work better for your client and might allow them to borrow more or reduce their overhead costs.
When we raise debt alongside corporate service providers and trustees, we think about how your client’s wealth is structured, how debt will fit into those structures, what will be fiscally advantageous, what assets it makes sense to put forward as collateral, and what will get them the best deal. We know how to work out what the best product is, how to maximise lending and what will get the best rates.
As a demographic, the only thing that makes one HNWI similar to another HNWI is the fact that they are wealthy. Usually, the similarities stop there. Some of your clients will have legacy wealth; others will have made a fortune over the course of their careers. Some will have lots of liquidity, and others will have a fantastic portfolio of assets but little income. Because your clients will be global, use international and offshore structures, and wealth is generated in so many different ways, your clients may have unusual financing requests, or they will want to raise finance against unusual assets.
Generally, no other group of people is as incompatible with packaged deals and unnegotiated debt as HNWI, wealthy families and entrepreneurs. This means that when it comes to debt for HNWI, there is no one-size-fits-all solution, and this is especially true if you need to source finance for an unusual request. Despite what you may think, unusual financing requests are actually very possible, but you’ll need a broker who can handle your clients’ requirements and negotiate finance for them. Here, our lender network and ability to advise on debt and structuring and negotiate all the finer points of the deal comes into its own. The more unusual the request, collateral or your client’s background, the more value we will add.
Usually, you’ll be expected to make things happen and solve problems quickly. When it comes to finance, usually this means that deadlines are tight, the requests are unusual and the loan is significant: a client wants to buy a trophy penthouse purchase in New York, they need capital so they can grow the family business, or they’ve hit a cash flow challenge and need liquidity quickly to solve it. The scenarios are endless, luckily, so is fast finance.
Getting high-value finance against the clock is its own area of expertise. We balance the speed with which we need to complete the deal for your clients with getting the best rates and terms – one can’t cancel out the other or your client won’t get the best deal. There are always options to get finance quickly, and depending on what product they’re using, we can often arrange that your clients can draw down funds in as little as a week. Bridging finance, securities-backed lending and corporate finance can all be arranged very quickly, for example.
If you need to raise debt for a client, the first stop will usually be your client’s usual bank. So far, so logical. But what happens if that bank doesn’t offer the product your client needs? (A surprising number of private banks don’t offer mortgages, for example). Or what if they turn your client down for a loan? You may also have a duty to ensure the loan is competitive on the market, which is hard to do if you only go to one lender. At the same time, you want to balance you’re the costs of approaching multiple lenders to secure offers for your client, which takes significant time.
When it comes to raising finance for HNWI, the key to getting the best deal is lender access. We have access to more than 500 mainstream and niche lenders, which comes on top of our peer-to-peer and boutique lenders, who can step in on unusual deals. Working with Enness, you will have access to all these lenders, which means you can streamline getting multiple offers through a single contact who will also advise you and your client and negotiate the loan.
Lenders don’t tend to negotiate with borrowers or their advisers, preferring to do so with brokers, who understand how, what and why a lender needs to see certain information to open up discussions. Negotiating is never about pushing a lender or playing hardball, and they are usually unswayed by your client’s profile or wealth. Negotiating is always about presenting the facts, bringing lenders comfort in the deal and helping them understand your client’s background and income.
From our side, we will work to arrange debt in line with your client’s existing structures – we can do this with UK and offshore entities. For corporate service providers and corporate trustees, this is key because in many cases, we will be able to arrange finance in deals where your client’s corporate entity is the borrower, which will streamline and optimse borrowing. These deals usually need specialist broking, because many lenders find it challenging to lend directly to structures, or in deals that involve structures – even relatively straightforward ones. It also opens up the door for your clients to borrow if they are asset rich but have little liquidity, or generate income exclusively via a trust, for example. Helping lenders understand your client’s structures and how they want to lend is key to arranging finance in this way.
Enness brokers high-value, cross-border finance, including high-value mortgages, securities lending, private debt, luxury finance, bridging finance, corporate finance and real estate finance. We specialise in deals that include UK and offshore corporate entities, trusts, and clients with complex income. No matter how much your client wants to borrow or where in the world they want to deploy their capital, we will source and negotiate a personalised finance package from our network of more than 500 lenders.