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Bridging finance offers rapid, powerful, and discreet funding for HNWIs looking to leverage their assets in time-critical situations to seize opportunities without the need to liquidate. It is not unusual for individuals to think of bridging finance assets as limited to your property portfolio, but a wider scope of asset-based bridging loans are available for those with valuable tangible assets, giving you the ability to unlock cash without delay - and without affecting your carefully curated portfolio of enduring assets.
As an alternative to Lombard lending and property-based bridging, asset-backed bridging loans provide a bespoke financing solution for the discerning collector.
Why Utilise Asset-Backed Bridging?
Opportunities require immediate responses. The agility to move immediately when chances arise is often the difference between a successful investment and a lost dream. In a competitive global environment where circumstances need to align precisely to provide even a small window for achievement, any delay can prove devastating.
Property-based bridging finance and Lombard loans have long been positioned as the rapid response funding solution for such situations, however, investors who diversified their portfolios away from pure real estate and listed equities may find themselves in a situation where instant access to significant capital is out of reach, requiring slow, conventional debt finance or - worse - asset liquidation to realise opportunities.
Asset-backed bridging finance provides a similar level of financial firepower, delivering capital without delay or disruption. It provides the discretion you need to avoid unwanted interest and speculation, releases equity from your assets, and gives you the liquidity that’s essential for a fast-paced world. Whether acquiring new property, seizing an investment while still attractive, or simply aligning cash flow, bridging finance is the tool you need.
- Speed - Funding in days, not months.
- Discretion - Confidential agreements, outside the public eye.
- Strength - Significant capital released against high-value assets.
- Flexibility - Retain ownership to preserve future options.
Structured as a short-term loan with a single exit strategy-based repayment, asset-backed bridging delivers the funds you need at the time you need them. Designed to be refinanced through long-term funding solutions, or paid off after a few months through alternative capital or income, bridging provides near-instant capital, giving you the time to put a longer-term plan in place without letting valuable opportunities slip through your fingers.
Read more about bridging finance with Clifton Private Finance’s extensive knowledge base articles.
What Qualifies as Collateral for Asset-Backed Bridging Finance?
All tangible assets that retain or appreciate in value and can be confidently moved in the secondary market are typically acceptable to the select specialist lenders who meet Clifton Private Finance’s premier selection criteria. Typical categories include:
- Property - Real estate can form a distinct selection for specific property-based bridging, or be folded into a larger portfolio for comprehensive asset-backed bridging finance. UK prime residential and investment properties, land earmarked for development, and high-value second homes, both international and domestic, can all be leveraged for high-tier bridging.
- Iconic automobiles - Collectors’ classic cars regularly form part of a strong asset catalogue for HNWI bridging solutions.
- Yachts and aircraft - Luxury craft that are backed by immaculate paperwork for maintenance and provenance can guarantee loans with superior LTVs.
- Fine art - Catalogued works by established artists provide financial liquidity in addition to aesthetic beauty.
- Collectibles - High-value collectibles, such as fine wines and rare spirits, personal book and manuscript libraries, prestige instruments and more, can all be strategically leveraged for immediate capital release.
- Jewellery and watches - From Patek Philippe to Tiffany & Co., stylish wearables with precious gems offer timeless equity.
- Precious metals - Gold bullion (and in some cases silver, platinum, or palladium) has a long history of providing essential collateral.
The secure market value of your assets will impact the LTV available for the bridging finance, with a range between 50-70% LTV depending on the specific asset, its volatility, and potential liquidity.
At Clifton Private Finance, our team will work with you to develop a structured pool of luxury assets, whether in a single category or of mixed type, to maximise capital release and speed process efficiency. Utilising existing valuations, we develop a realistic estimate prior to the lender’s specialist appraisal and due diligence.
Asset Security and Insurance
Pledged assets are moved to professional custody where appropriate, with full insurance attached. These remain controlled for the whole loan term. Full technological security is put in place to ensure safety, including:
- Comprehensive chain-of-custody structure.
- GPS-tracked logistics.
- High-security storage in climate controlled vaults.
- Constant monitoring and ongoing reporting.
These precautions significantly lower lender risk, providing guarantees that enable significant funding at the maximum LTV.
The Process for Asset-Backed Lending
With speed and discretion at its core, when accompanied by well-prepared documentation, asset-backed lending is smooth and rapid.
Asset-Backed Bridging vs Lombard Lending
Asset-backed bridging should be considered a complementary financial tool to a Lombard facility, rather than a competing product. Utilising your tangible assets rather than marketable investments, asset-backed bridging provides an additional line for credit that allows you to diversify your debt management for increased flexibility and agility.
Consider:
- Lombard loans - Also known as investment-backed lending, a Lombard facility is best when your wealth portfolio is centred around equities, bonds, and other non-tangible investment funds.
- Property bridging - Best when purchasing real estate assets, developments, and when sizeable equity exists in your current property portfolio.
- Asset-based bridging - Best if your wealth is tied up in tangible (‘real’) assets that you do not wish to sell at short notice, or when discretion is paramount: asset-based bridging does not result in any public listing or charge on primary residences.
HNWIs looking to maximise their investment potential typically make use of all three fast-access funding solutions, providing the strongest leverage against a range of existing assets.
A Greater Understanding of Asset-Backed Bridging
At Clifton Private Finance, we are often asked about the reliability and risks of asset-backed bridging. Individuals looking to leverage their assets as collateral must consider their long-term plans, the viability of any funded investment, and wider market issues when determining the correct path.
Some questions include:
Can I use my asset? What if it gets damaged or stolen?
Security and insurance are vital considerations for both parties. This is why lenders insist on watertight security during the entire loan term. When you secure bridging against a yacht or private jet, you are not able to use it for obvious reasons; if you obtain bridging with an art piece as collateral, it is no longer hanging in your dining room for guests to admire; and finance obtained against jewellery means those items cannot be worn to an upcoming gala. Once the loan term is complete, the assets return to you for unrestricted use.
All moveable assets are tightly controlled, with advanced technology to ensure not only their security, but their safety, right down to atmosphere control for rare books, or ongoing checks and maintenance for classic cars. Maintaining value is essential in all cases.
Insurance is absolutely comprehensive. In the unlikely event of damage or theft, full compensation will be provided.
What about market movement?
Bridging is a short-term product, with 3-6 month terms standard. Except in extremely volatile markets, where LTV would be set accordingly, market fluctuation is unlikely.
Nonetheless, it can happen. If it does, lenders may require additional assets for collateral to meet the required security, or request a move to exit the bridging loan.
Is bridging expensive? What are the terms?
Bridging finance is more expensive than long-term loans. Interest rates are balanced by the speed of approval and the flexibility built into the structure, positioned a point or two above the reference rates. However, for its core use, bridging is extremely cost-effective.
When the alternative is to lose out on a once-in-a-lifetime opportunity or heavily discounted sale, bridging finance is a powerful option that is well worth the cost.
What example use cases are there for asset-backed bridging?
At Clifton Private Finance, we encounter a range of bridging needs. Consider the following:
- Property timing - You need to exchange on your new Chelsea home, but your expected capital is delayed by six weeks. Bridging allows you to leverage a painting, plus your classic car collection to complete on time - and then exit when the original capital is released as expected.
- An auction opportunity - A sought-after manuscript has come to your attention at an auction happening this week. Acquire it using bridging finance, which can then be calmly refinanced in the coming months after the dust settles.
- Business working capital requirements - Your company operations require a capital injection to secure an important new contract. Leverage your gold bullion stock through bridging to provide the much-needed funds without diluting equity.
Is asset-based bridging common?
Long-term asset-based lending secured on art or whiskey collections has long been available. The funding market has matured in recent years to recognise the value of other luxury assets and specialist collections and their application as collateral for rapid, short-term bridging finance.
Specialist UK providers now operate with FCA regulation and a range of clearly-defined asset-based products. As an experienced specialist broker, Clifton Private Finance has long stood at the gateway to these important funding options, providing bespoke solutions for our clients that cater for every opportunity. For a confidential consultation, speak to a CPF advisor today.
Asset-Backed Bridging with Clifton Private Finance
Partnering with CPF means your financial liquidity is effortless. We will manage the entire process from end-to-end, working with your representatives to ensure discreet valuations, building an aligned lender list, and overseeing execution through delivery to your final exit. With a dedicated account manager, you’ll have a single point of contact who will tailor the loan structure to match your assets, required timing, and currency considerations.
For more information and to open the door to unparalleled funding opportunities, contact Clifton Private Finance today.
