Lombard lending, explained.

Lombard lending is the practice of lending against a pledge of liquid assets — most often listed shares or a diversified securities portfolio. The borrower pledges the assets as collateral, draws a cash advance against a fraction of their market value, keeps beneficial ownership and dividends subject to structuring, and recovers the assets in full on repayment. A single facility arranged this way is a Lombard loan; the activity itself is Lombard lending, known in other markets as securities-backed lending.

How Lombard lending works

The mechanics are consistent across markets. The borrower pledges a defined pool of securities to a custodian under a security agreement. Against that pledge, the lender advances cash equal to a percentage of the pool’s market value — the loan-to-value. Interest accrues on the drawn amount for the term of the facility, and the pledged assets remain the borrower’s property throughout. When the borrowing is repaid, the pledge is released and the borrower’s control over the assets is unencumbered once more. Because the assets are pledged rather than sold, the borrower keeps the economic exposure, the dividends and the vote (subject to structuring), and does not trigger the disposal that a sale would represent.

Lombard lending, Lombard loan, securities-backed lending

These terms describe one discipline at different levels. Lombard lending is the activity of lending against pledged securities. A Lombard loan is a single facility arranged that way. Securities-backed lending is the same activity under the name favoured in institutional and US markets, and a share-backed loan is a plainer description of the same thing. A revolving version — a limit you draw and repay rather than a one-off advance — is usually called Lombard credit or a Lombard credit line. Throughout, the structure is identical: pledge liquid securities, borrow against a fraction of their value, keep ownership.

How much you can borrow

The amount advanced is the loan-to-value, and it is set per portfolio rather than per asset class. A diversified, liquid book of large-capitalisation shares supports a higher advance than a single concentrated small-cap holding, because the lender can value and, if necessary, realise the collateral with far greater confidence. The drivers are liquidity and free float, volatility, the size of the position relative to the market, single-name concentration, and the recourse profile. A fuller treatment sits on how much you can borrow against shares, and the firm publishes an indicative LTV calculator for a transparent first estimate.

What it costs

Pricing is a reference rate in the loan currency — such as SARON, SOFR, SONIA, or EURIBOR — plus a spread that reflects the loan-to-value, recourse, tenor, and the liquidity and volatility of the collateral. There is no published rate card; the right basis for comparison is the whole structure, not the headline coupon. The interest rates and costs page sets out the components in full.

Who uses Lombard lending

Lombard lending is used by private clients and their family offices, company founders with concentrated personal holdings, controlling shareholders, and institutional holders using listed equity or a securities portfolio as collateral — substantial holders who want liquidity without giving up a position. It is arranged privately, on terms calibrated to the holdings and the holder, and never at retail. The recurring applications are set out under use cases.