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Using Portfolio Finance

You can use securities lending to create liquidity to solve a challenge, chase an opportunity, generate better returns through reinvestments, or diversify your portfolio more broadly.

From London where Enness’ specialist portfolio finance team is based and where deals are arranged, Enness brokers loans and portfolio finance Monaco-based individuals looking to borrow significant amounts of capital against their stocks or securities. Whether you are looking for a traditional Lombard loan or a more niche finance solution in the form of a pre-IPO loan, a loan against unlisted stock or a loan against a single line of stock, Enness will be able to help.

Enness London-based portfolio finance brokers are specialists in brokering cross-border portfolio finance and loans with an international component (that might be you as the borrower in Monaco, the location of your securities, or where you will deploy the capital you borrow). Whatever your circumstances, your broker will be able to secure and negotiate finance for you regardless of how complex or ambitious your plans are.

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Securities Lending: Overview

A Lombard loan (also known as securities-backed lending) describes the practice of a borrower securing a loan that you collateralise against your stocks, bonds, and other financial assets (i.e. shares in a company, etc.)

Borrowers can also use investment funds, equities and various other securities as collateral for this type of finance. Enness can broker finance against global securities, which is often highly advantageous for Monaco residents, who usually have securities on various stock exchanges around the world.

Lenders provide a credit line against your securities. Securities-backed lending is a short-term lending mechanism, and you will be able to borrow for around two years at maximum. The minimum term can be as little as a few days. You will generally be able to utilise your credit line at any time during the loan term - you do not have to draw it down immediately, although many borrowers do.

Lombard loans are seen as especially beneficial since they enable you to access the capital locked up in your securities without having to sell them. Enness can broker this type of finance exceptionally quickly. The underwriting process goes much faster than other types of lending, often allowing you to draw down funds in a matter of days or weeks. Although they will move quickly, expect lenders to focus on the most important parts of the deal, including the securities you'll use as security for the loan, your exit, and how much you want to borrow.

Types of Securities-backed Lending

You will have several options regarding the type of assets you can use as collateral for a loan and how you can deploy the finance. For context, traditionally, Lombard loans could only be used in relatively ‘plain vanilla’ transactions, meaning in scenarios where the stocks were highly liquid and, usually, exclusively listed on major stock exchanges. Today, there is significantly more choice of lending products. You will find that you can use a wide variety of securities and stocks as security for a loan, which essentially reflects the more diverse investments high-net-worth borrowers typically hold, especially if you are based in Monaco with securities located globally.

Lombard Loans

Lombard loans are the most frequently used type of securities-backed finance, and this lending mechanism allows you to borrow money for as little as a week and up to two years at maximum.

Generally, it is relatively easy to secure a Lombard loan if you have very liquid stocks listed on big stock exchanges - think London or New York. In these cases, it is a viable path to approach lenders yourself, and many borrowers with simple transactions source very competitive packages without needing the help of a broker.

However, it is more challenging to find lenders who will be able to offer this type of finance against securities on smaller exchanges or in cases you’re your stocks are less liquid. In these scenarios, Enness’ brokers will come into their own. Your broker will be able to negotiate finance packages against securities on smaller exchanges or less liquid shares, something that is often challenging if you are searching the market alone. International non-bank, niche or alternative lenders are often best placed to offer this type of finance.

However, accessing these creditors can be challenging if you are based in Monaco, and the lender doesn't have a presence in the Principality. For any deal that is 'non-standard' (including international borrowers, significant borrowing, ambitious plans and so on), a broker is invaluable when it comes to getting your case in front of the lenders that can actually facilitate borrowing as well as presenting your case in the strongest light.

Enness specialises in brokering high-value portfolio finance. Enness will be able to build a competitive Lombard loan deal for you, regardless of what you need funding for or how much you want to borrow.

Single Stock Loans

Single stock loans are a relatively new lending product on the market, and not every lender can offer them. However, they are particularly useful for many Monaco-based borrowers if you have significant holdings in a single business that forms a substantial portion of your net worth. That said, lenders will want to understand why you have so much of your net worth associated with a single line of stock. Lenders will essentially want to make sure there is a logical reason for your situation, rather than it being the result of a haphazard investment strategy, for example.

Single stock loans are a niche offering, and the lenders who provide them are typically smaller but highly experienced players rather than big banks. Many of these lenders prefer introductions from brokers and do not accept direct applications.

Pre-IPO Loans

Pre-IPO loans are becoming a more mainstream lending product as more companies give stock options to employees before going public as part of their employment packages. While not necessarily relevant for Monaco-based companies (which can be smaller, niche, and have a local focus), sometimes a Monaco-based resident will have shares in pre-IPO firms in the US, UK, or other prominent financial centres.

Releasing equity in pre-IPO stock has traditionally been exceptionally challenging. Selling shares is usually not an option, given that post-IPO, the value of the equity in the company is likely to rise significantly. Many borrowers, therefore, want to retain ownership of their shares but leverage these to be able to release equity in the short term.

Few lenders operate in this space, and securing the best deal is often a question of who you know. Enness has access to all lenders who offer credit against pre-IPO stock and will work with you to negotiate the very best package available on the market.

Unlisted Stock Loans

Unlisted stock loans are also a recent addition to the lending market. Lenders used to avoid this type of loan because it was complicated to arrange for a relatively small pool of potential borrowers. However, with the emergence of highly successful private enterprises and family-owned businesses, more lenders can lend against unlisted stocks today than in the past.

If you have amassed a substantial amount of wealth or net worth in the shares of a private business, or you have an unlisted family business, this type of finance can be ideal. You can use unlisted stock loans for various purposes, including to access working capital, investing in the firm to accelerate growth, diversifying holdings or embarking on other high ROI projects.

Securities Lending: Overview

A Lombard loan (also known as securities-backed lending) describes the practice of a borrower securing a loan that you collateralise against your stocks, bonds, and other financial assets (i.e. shares in a company, etc.)

Borrowers can also use investment funds, equities and various other securities as collateral for this type of finance. Enness can broker finance against global securities, which is often highly advantageous for Monaco residents, who usually have securities on various stock exchanges around the world.

Lenders provide a credit line against your securities. Securities-backed lending is a short-term lending mechanism, and you will be able to borrow for around two years at maximum. The minimum term can be as little as a few days. You will generally be able to utilise your credit line at any time during the loan term - you do not have to draw it down immediately, although many borrowers do.

Lombard loans are seen as especially beneficial since they enable you to access the capital locked up in your securities without having to sell them. Enness can broker this type of finance exceptionally quickly. The underwriting process goes much faster than other types of lending, often allowing you to draw down funds in a matter of days or weeks. Although they will move quickly, expect lenders to focus on the most important parts of the deal, including the securities you'll use as security for the loan, your exit, and how much you want to borrow.

What Can Lombard Loans Be Used For?

Securities-backed lending can be used for a variety of purposes by Monaco-based borrowers with global securities. Enness brokers these loans from London.

This type of finance is often used to create liquidity that allows you to make investments, purchase property, diversify a portfolio (particularly useful if you have significant wealth tied up in a few lines of stock), grow a business, pursue opportunities and so on.

Whatever you are borrowing for, expect lenders to want to see concrete plans. You will need to explain how you plan to use the loan, how you will exit (pay back the loan), and how much you want to borrow.

Securities-backed lending is exceptionally flexible, and lenders will be open to even relatively creative plans, exits and projects. As long as you have a well-thought-out strategy, you can easily afford the loan, and your numbers add up, Enness will be able to broker finance.

Using Enness For Securities-Backed Lending

While many lenders offer securities-backed loans, not every lender will be the right fit for your scenario or situation. Often, you will be able to approach lenders directly, but sometimes a lender may not be able to offer a loan because of your securities, your plans or your how much you would like to borrow. The fact that you are based in Monaco can also present challenges – there are local lenders in the Principality, but they tend to cater exclusively to straightforward transactions. Where international lenders will be a possibility for you, accessing them can be difficult, and some will not offer cross-border finance to borrowers based in Monaco.

With access to all the lenders on the market, Enness’ London-based brokerage team will be able to source the very best securities-backed lending deal for you. From the UK, your portfolio finance broker will maximise what you can borrow and will be able to negotiate the most flexible terms for you.

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Contact Enness

No matter why you want to borrow or how much you want to borrow, Enness will source competitive rates and terms for you portfolio finance. Enness will be able to broker the finance packages that would be impossible to acquire if you were to search the market alone. Get in touch to find out more about how Enness can help.

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Guide to Securities-Based Lending

Securities-based lending provides ready access to capital. From purchasing a property, buying assets, investing in stocks or growing a business, you can use securities-backed lending (also known as Lombard loans) for various purposes.

Securities-based lending can be an exceptionally useful tool for creating liquidity quickly. As well as more “traditional” Lombard loans against a diverse portfolio of liquid, listed securities, Enness can also broker more unusual deals. This includes sourcing and negotiating loans against unlisted  stocks, single stocks and pre-IPO loans.

Lenders in this space provide funding while using the securities available to a borrower. These loans are typically used to access liquidity quickly, allowing investors to take advantage of time-sensitive opportunities.

Building up a representative portfolio to gain access to this lending space change can be challenging. Enness has a proven track record in acting in clients’ best interests and negotiating the best outcome on their behalf.