Lombard loan

A lombard loan is a loan secured by securities.

A lombard loan is a form of credit where the collateral is marketable securities ensure. In order to take out a lombard loan, it is definitely necessary to invest in marketable securities, which a non-purpose loan collateral will be.

The Lombard loan request basically, it is faster and involves less administration than if it is less liquid coverage the borrowing would take place in addition to. Financially, it is worth it to the borrower if it is available for investment in securities yield Exceeds credit costs. (In the calculation of the latter, interest and other fees and expenses are also taken into account.)

For example, it is worth thinking about a Lombard loan in a situation where it is basically a long-term investment portfolio besides temporary liquidity a need arises. Thanks to the Lombard loan, there is no need to get out of the fixed investment prematurely, because it can be used as collateral to secure financing.

For businesses, the Lombard loan can become even more interesting because the identity of the borrower and the guarantor can be separated from each other.

That's why it is starter or for smaller companies that have difficulty accessing bank financing, the Lombard loan is a shareholder loan can be a realistic alternative. In this case, the company takes the loan, while the owner provides the collateral. In this way, you can contribute to the financing of the company without having to part with your investments, and you also get access to their returns without change. It is an additional advantage for the company that the hired loan interest rate can be accounted for among the costs of the business.