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fast and flexible lending against your investments

Investment backed lending could give you quick access to funds for that next big opportunity.

Why use investment backed lending?

Whether you want to buy something special that’s just come up for sale, invest in a business or support a loved one, investment backed lending could give you access to funds when you need them most – without disrupting the savings or investments you've set aside for your future.

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How does it work?

Investment backed lending is a type of financing that allows eligible clients to borrow against their investments without having to take any more out of their portfolio. It's usually provided as a type of overdraft but can be taken as a loan too.

Because you're borrowing against your investments, you won't be subject to time-consuming valuations. This means that the process can move relatively quickly, with everything agreed and set up in a matter of weeks. Subject to approval, of course.

Am i eligible?

To qualify for investment backed lending, you must:

  • have over £500,000 in investments with Coutts
  • be over 18
  • demonstrate a sound understanding of the risks involved

It may not be suitable for you if:

  • you rely on the income and capital from your investments and cash to maintain a standard of living
  • you’re considering it for residential property renovation or improvements

key benefits

Multi-currency availability

Investment backed lending is available in five currencies: Pound Sterling, Euros, US Dollars, Swiss Francs and Japanese Yen

cost effective

You don't pay legal, valuation or arrangement fees and there's no fixed term repayment fee

flexibility

If it is taken as an overdraft, it functions similarly to a traditional overdraft: you only pay interest on the amount drawn. Conversely, if it is taken as a fixed advance (loan), you can have multiple loans as required under a single overarching agreement.

Like any form of borrowing, it’s important to be aware of the risks versus the returns, and of what else is available. Investment backed lending is just one option and our private bankers and wealth managers are on hand to help you explore all possibilities.

how it has helped our clients

Here are examples of how investment backed lending has benefitted our clients:

  • Buying a dream house

    One of our clients came across the unexpected opportunity to buy a house on the street of her dreams. Rather than put her house on the market she opted for investment backed lending, using her investments as collateral. This meant that she could act as a cash buyer and give confidence to the seller.

    She was able to do all of this without the added complexities of mortgage financing and marketing her property.

    Other clients have used investment backed lending to purchase property overseas or buy-to-let investment properties to diversity their wealth.

  • Injecting capital into a multinational business

    A client wanted to inject capital into their business through a director's loan without liquidating part of their investment portfolio to fund it. An investment backed lending facility was set up, which allowed them to keep their investments intact.

    The business operated across multiple continents so the investment backed lending facility allowed them to move money into their business in the required currencies, therefore avoiding currency exchanges fees.

  • Investing in art from around the world

    A client interested in art wanted to diversify their investments. His banker introduced the client to the Coutts Arts club. The use of investment backed lending gave the client the flexibility to buy pieces he wanted as and when they became available, without disrupting his long-term portfolio plans. The client also had the benefit of having his investment backed lending in one of five major currencies, allowing his search to go global.

    The client has since built an impressive collection and achieved his goal of diversifying his investments, while still enjoying the freedom to take advantage of future opportunities.

    As well as art, clients have invested in wine, collectible watches, vintage cars and other pursuits.

  • Paying for a child's wedding and family home

    A client approached his banker to liquidate his portfolio so that he could support his daughter in getting married and buying a family home. The banker was able to help the client with his plans but without disrupting the client’s ultimate goal by providing investment backed lending. The client was able to gift the money as planned to his daughter but stay in the markets as desired.

    Investment backed lending allowed our client to gift his assets to the next generation to assist with life events happening imminently.

Important information

Before you borrow against investments, you should understand these risks: 

  • If the security you provide is insufficient to support the amount you have borrowed, you may be required to rectify the shortfall at short notice – this is referred to as a margin call.
  • If your borrowing is in a different currency to the limit, fluctuating exchange rates could result in the limit being exceeded and you may be required to rectify the shortfall at short notice – this is also referred to as a margin call.
  • If you borrow to purchase investments and these investments are themselves provided as security for your liabilities, your losses or gains could be magnified.
  • Investment values can fall as well as rise, your capital is at risk.

Lending against investments must not be used for residential property renovation or improvements.

The final decision whether to proceed must be your own and in making your decision you should carefully consider the comparison between borrowing costs and potential investment gains/losses.

How do i apply?

It all starts with a conversation with your private banker to discuss your needs and ensure you meet the necessary criteria.

Our specialists are here to discuss your options.

Request a callback