Lending value
What is a lending value, and how much can you borrow against an investment portfolio?
ONE OF 209 TERMS · FREE · NO SIGNUP
BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
// THE SHORT ANSWER
A lending value is the share of an asset's market value a bank will lend against, set by how quickly and how far the asset's price can fall. In one composite file, a private bank lends 50% against listed shares and 70% against high-grade bonds, and the sum of those amounts is the most the client can borrow against the portfolio. When prices fall, the lending value falls with them, and a loan that was covered can need new money or a sale: a margin call.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
// WORKED IN
// NEXT TO IT
- Personal guarantee release
- General security agreement (GSA)
- Subordination
- Intercreditor agreement
- Loan to value ratio (LVR)
- Forced-sale value
- PPSR (Personal Property Securities Register)
- Retention of title
- Purchase money security interest (PMSI)
- Preferential creditors
- Letter of comfort
- Cross-guarantee
- Floating charge
- Structural subordination
- Recovery waterfall
- First mortgage
- Pari passu
- Loan to security ratio (LSR)
- All-monies clause
- Valuation reliance letter
- Solicitor's undertaking
- Loss payee (bank's interest noted)
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