Lombard Credit and Loan Guide

Introduction

• Overview of Lombard Credit and its historical significance.
• Lombard credit predates modern banking, used for over 500 years by wealthy families in Europe.

What is Lombard Credit?

• Asset-backed financing collateralized against liquid investments.
• Common collateral includes:
  • Stocks
  • Bonds
  • Exchange-Traded Funds (ETFs)
  • Life insurance
• Typically results in favorable interest rates for clients.

How to Access Lombard Credit

• Importance of understanding the Lombard credit process.
• Free non-resident banking starter guide available in the video description.

Historical Context

• Originated in northern Italy in the 12th century.
• Involvement of the Franciscan order circumventing interest charging restrictions by the Vatican.
• Expansion of Lombard lending by goldsmith bankers and moneylenders across Europe.
• Influence on modern banking and persistence of Lombard practices today.

When to Use Lombard Credit

• Not exclusive to the wealthy; accessible to various clients.
• Lombard loans allow borrowing against liquid assets.
• Differences between Lombard loans and mortgages:
  • Lombard loans tied to liquid investments, while mortgages are tied to fixed assets.
• Favorable rates due to bank's custody of collateral.

Factors Impacting Interest Rates

• Lombard loan interest rates depend on:
  • Bank's cost of borrowing (inter-bank rate)
  • Bank's margin (typically 1-3%)
• Rates are negotiable; borrowers should discuss terms with banks.
• Banks encourage clients to invest in additional securities, benefiting both parties.

Benefits of Lombard Credit

• Immediate access to capital without liquidating investments.
• Flexible use for various opportunities.
• Provides liquidity during cash shortages.
• Favorable interest rates compared to traditional loans.
• Flexible terms and accessible in multiple currencies.

Who Should Consider Lombard Credit?

• Best suited for private banking clients with established relationships and liquid investment portfolios.
• Initial deposits typically between $1 million to $5 million required for access.

Lombard Loan vs. Mortgage Loan

• Lombard loans require liquid assets; mortgages are based on fixed asset values.
• Lombard loans allow leveraging investments without liquidation, creating economic benefits for both banks and clients.

Risks of Lombard Credit

• Risks include losing collateral if payments are missed.
• Potential for margin calls if asset values drop below loan-to-value ratios.
• Importance of understanding risks before engaging in Lombard credit; consult a qualified advisor.

Conclusion

• Access to information on banks offering Lombard credit, their requirements, rates, and financing strategies available.
• Encouragement to subscribe for updates on banking opportunities.