Family office and entrepreneur financing: what the banks mean, and how a NAV loan does the same job
Private banks describe the use. A NAV loan is the structure. Here is where the terms differ, with three worked scenarios.
Last reviewed November 2026.
Over the past year several European private banks have announced facilities for family offices and entrepreneurs in a format that describes the use rather than the instrument: a loan to an entrepreneur’s investment office to fund part of its capital calls, or to build a diversified liquid portfolio alongside the private one. The announcements rarely use the words NAV loan. They are describing one. This note sets out what the banks mean, where a specialist facility differs, and what the same money looks like in three common situations.
What the banks mean by family office financing
A bank’s family office financing is a loan to the family’s investment company or holding structure, secured on the assets that structure owns. Where those assets are private fund interests, direct company stakes or a mix of the two, the loan is sized against their value and repaid from distributions and realisations. That is a NAV loan in everything but name. The term comes from fund finance, where the loan is to a fund and the collateral is its portfolio; applied to a family office, the fund is simply the family’s own investment vehicle.
The bank’s version usually comes with two conditions. The advance against private assets is modest, typically 10% to 15% of value, because a bank’s credit committee treats private fund interests as hard to value and hard to sell. And the facility is offered as part of a relationship: custody, deposits and wealth management move to the bank, which is how the bank makes the economics work on a thin margin.
Where a specialist facility differs
A specialist underwrites the portfolio rather than the relationship. We look at the funds in the book, the managers behind them, the vintage spread and the expected pace of distributions, and we lend up to 30% of verified value, higher for very diversified books of institutional funds. There is no requirement to move any other business. The term is one to five years, extendable, with interest paid in cash or capitalised and no early repayment penalty. Pricing is higher than a bank’s: our indicative range for most facilities is 450 to 750 basis points over the reference rate, and every facility is custom, with pricing confirmed only in a signed term sheet.
Timing is the other difference. We give an indication of appetite within three business days of receiving the portfolio schedule and NAV statements, a term sheet within a week, and funding typically follows four to six weeks after the term sheet. Bank committee cycles for a bespoke private asset facility run longer.
The right answer depends on the family. A family that wants a single banking relationship and needs a small advance against a large portfolio is well served by its bank. A family that needs a larger advance, wants to keep its existing custodians and advisers, or needs the money inside a quarter, is the client we are built for.
Three scenarios
These are illustrations, not transactions, and the figures are chosen to show the shape of each facility.
Funding capital calls for an entrepreneur’s investment office
A European entrepreneur sold an operating business and committed the proceeds across 18 private equity and venture funds through a Luxembourg holding company. The portfolio is valued at $80m, with $25m of unfunded commitments due over the next three years. Rather than hold $25m in cash or sell positions, the office takes a $20m facility at 25% loan-to-value, drawn as calls arrive and repaid from distributions as the older funds mature. The office keeps every position and its liquid portfolio stays invested.
A direct acquisition alongside the fund portfolio
A US family office with $150m across 30 buyout, growth and credit funds in a Delaware holding company wants $35m to buy a controlling stake in a private company it has followed for years. A sale of fund interests at the secondary market’s discount would cost several million dollars on the day and all of the future return on the sold positions. A $35m facility at 23% loan-to-value over three years funds the acquisition, with the loan repaid from distributions and, if the family chooses, from a later refinancing against the acquired company.
A tax liability without a forced sale
An individual holds $60m of fund interests through a personal holding company and faces a tax liability of $12m at a fixed date. The portfolio is distributing but not on that timetable. A $12m facility at 20% loan-to-value pays the liability on time. Distributions over the following two years repay the facility, and the holder never sells at a discount to meet a deadline.
What to prepare
For any of the three, the same information starts the process: a schedule of the fund interests and direct holdings with commitments, value and unfunded amounts; the latest capital account statements from each manager; a note on the use of proceeds and how the facility is expected to be repaid; and the holding company structure. With that in hand we give an indication of appetite within three business days. Our indicative terms are set out on our NAV loan parameters page, and the full guide to how these facilities work for families and individuals is on our page on NAV financing for family offices and individuals.
Questions principals ask
Is family office financing the same as a NAV loan?
Where the loan is secured on private investments and sized against their value, yes. The bank describes the use; NAV loan describes the structure. The terms, advance rate and conditions differ between providers.
Can an entrepreneur who is not a family office get this facility?
Yes. The borrower is the holding company that owns the investments, and whether the principal calls it a family office, an investment office or a personal holding company does not change the facility.
Does the family have to move its banking?
Not with us. We take security over the holding company and the accounts that receive distributions. Custody, deposits and wealth management stay where they are.
General information, not advice. Nodem Capital is an FCA-authorised AIFM (fund manager). Nodem Ltd is authorised and regulated by the Financial Conduct Authority, FRN 1017481.
