How do you secure something you might have been waiting a whole lifetime for? Wealth may bring agency but it can’t always guarantee that you’ll be able to seize a rare opportunity like your ideal pied-à-terre, or a unique artwork or business venture when it presents itself. You might have planned for the medium-term with tactical deposits and for the future by investing for potential long-term growth, but that shouldn’t preclude you from having liquidity for a special spend in the short-term.
Agency to seize that moment could be unlocked through a simple lending facility secured against your investments. We term this as Investment Backed Lending, and by utilising it you may not have to sell off any assets – meaning there’s no need to trade one opportunity for another. You could remain invested over the long-term, avoiding crystalising any potential tax or exit cost and avoiding selling out of markets at an inopportune moment.
Creating opportunity – how we’ve helped clients create liquidity
Once in a lifetime property purchase
A client came across the unexpected opportunity to purchase 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 she could act as a cash buyer and give confidence to the vendor.
She was able to do all of this without the added complexities of mortgage financing, estate agent fees and marketing her own property. Other clients may be able to use Investment Backed Lending to purchase property overseas as the loan can be issued in multiple currencies. Equally, a loan could be used to purchase buy-to-let properties to diversify a wealth portfolio.
Seizing a business opportunity
A client wanted to inject capital into their business through a director’s loan without liquidating part of their investment portfolio to fund it. By using their Investment Backed Lending facility they were able 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 FX fees.
The flexibility to build an art collection
A client interested in art wanted to diversify his investments. His Private Banker introduced him to the Coutts Art Club and helped set up an Investment Backed Lending facility. This meant he was able to buy the pieces he wanted when they came to market, without disrupting his long-term growth portfolio plans. The benefit of having multiple currencies on offer through Investment Backed Lending allowed his search to go global, and he was pleased not to have to pay any arrangement or renewal costs, so the facility cost him nothing until his next purchase opportunity was ready to complete.
Beyond art, clients are also able to explore other passions and alternative investments such as wine, timepieces and vintage cars.
Providing for your children
A client asked their Private Banker about liquidating their portfolio in order to support their daughter in getting married and buying a family home. By providing an Investment Backed Lending facility, their Private Banker could support these plans without disrupting the client’s long-term growth goals as they were able to gift the money to their daughter but remain invested in markets. Potentially providing greater wealth for the family in the future.
Investment Backed Lending can be swift and straightforward. We could offer you a pre-approved limit up to a certain size, without the need to ask for evidence of income and expenditure. Once a facility is in place, we may be able to release the funds you need on the same day they are requested and there is no cost to having this facility in place until utilised.
Important information
Of course, taking out a loan against your investments should be done in line with your long-term goals. If it is the right facility for you, your Private Banker is on hand to discuss your goals and set this up and allow you to potentially seize future opportunities.
Explore your Investment Backed Lending options
Eligibility criteria –
To qualify for Investment Backed Lending you must
- Hold over £1 million in investments with Coutts
- Be aged 18 or over
- Demonstrate a sound understanding of the risks involved
It may not be suitable if –
- You rely on the income and capital from your investments to maintain a standard of living
- You’re considering it for residential property renovation or improvements
Using your investments as security carries risks. If the value of your assets falls or market conditions change, you may receive a margin call and need to add funds or reduce your borrowing at short notice. For further information about Investment Backed Lending, including the potential benefits, risks and fees (if there are any) please contact your private banker.
Please be aware that the value of investments and the income from them can fall as well as rise, and you may not recover the amount of your original investment. Past performance should not be taken as a guide to future performance and you should continue to hold cash for your short-term needs. Eligibility criteria apply. Advice and product fees may apply.
