For High Net Worth individuals (HNW’s) or international investors with complex income streams, traditional high street banks can fall short in delivering personalised financial solutions. When conventional debt-to-income models or strict documentation hurdles block opportunity, the private banking model steps in — offering flexibility, confidentiality, and creative structuring.

This article explores how private banks craft bespoke lending facilities and in which scenarios they become essential.

1. Beyond the Checklist: Flexibility and Bespoke Structuring

Unlike retail banks, private banks are relationship-driven lenders. Where a mainstream institution might reject an application that doesn’t fit automated underwriting criteria, a private bank can:

• Accept non-traditional income sources (e.g., trust distributions, carried interest, equity compensation, royalties)
• Use global assets as collateral, including art, yachts, private company shares, or overseas real estate
• Consider liquidity events or future business exits in underwriting

2. When Private Banking Lending Is Most Advantageous

Here are key use cases where private lending models outperform:

Cross-Border Property Financing

• Lending against French property while client resides in Dubai, London, or Singapore
• Currency-matched structuring: borrowing in euros, USD, or GBP to match income or asset base
• Foreign income sources accepted with in-house FX and legal teams

Asset-Backed Lending

• Loans secured against listed securities portfolios (Lombard loans)
• Structured lending against hedge fund positions or private equity holdings
• Liquidity financing against luxury real estate or illiquid investments

Multi-Jurisdictional Wealth Structures

• Trust- or foundation-based ownership
• Tax-aware loan structuring for international families
• Leveraging international holding companies or Special Purpose Vehicles (SPVs)

Private banks excel where complexity, confidentiality, and cross-border exposure demand a higher level of institutional sophistication.

3. Competitive Terms & Higher LTVs: What’s Possible?

Interest Rates & Terms

• Rates may be custom-negotiated, especially with offsetting AUM (assets under management) commitments.
• Clients with >€2 million in custody may receive:
  • Below-market fixed rates
  • Flexible repayment profiles (e.g., interest-only terms, bullet repayments)

Innovative Structuring

• Back-to-back loans: Borrow euros while depositing USD to hedge FX risk
• Dual-recourse agreements: Collateral pooled across asset classes and geographies
• Credit lines structured against expected capital events (IPO, fund liquidation)

Private banks are motivated by relationship longevity, not just lending margin. This often results in long-term thinking and greater client alignment.

4. Accessing Private Banking Services

To benefit from private bank lending:

• Minimum Assets Under Management (AUM) thresholds apply — typically €500,000 to €5 million

Conclusion: Precision Lending for Global Lives

In a world where wealth is global, mobile, and complex, traditional banks increasingly lack the tools to support nuanced borrowing needs. Private banks fill this gap with relationship-based lending that:

• Accommodates unique income streams
• Uses global asset footprints as collateral
• Tailors structures for taxation, currency, and long-term wealth goals

For those seeking to leverage global real estate, hedge portfolios, or unlock liquidity — private banking is not just an option. It’s the most strategic choice.