Lombard lending is the business of using collateral such as equities as security against loans. To date, it has tended to be a specialist activity for the likes of private clients and HNW and UHNW clients, rather than the more general affluent population.

Firenze, a UK fintech that says it is redefining Lombard lending, has closed a £2.5 million ($3.23 million) seed funding round. 

The round was led by Outward VC and other early stage fintech investors such as Form Ventures and Portfolio Ventures.

Firenze aims to expand Lombard lending – lending where equities and certain other securities are used as collateral – beyond the traditional boundaries of private bank clients with £1 million or more in assets. The business wants to expand this activity to the mass-affluent market over the next three years.

The firm says Lombard lending enables people to obtain liquidity without disrupting their investment plans and triggering capital gains taxes – an important consideration at a time of rising tax burdens.

The Firenze platform offers loans from as little as £65,000, secured against clients’ investment portfolios.

The business already works with wealth managers overseeing around £75 billion in assets under management. 

"Market demand has far exceeded our expectations and this funding enables us to accelerate Firenze’s rollout to more wealth managers, support their advisors and drive awareness on the benefits of Lombard lending,” David Newman (main picture), CEO of Firenze, said in a statement. 

Since its launch a year ago, Firenze has, for example, announced a strategic partnership with Monument Bank, the UK challenger bank; it has appointed board members such as Paul Pester as chair (Virgin Money, Tandem Bank and TSB), Samantha Bamert (Barclays, Ask Inclusive Finance) and Mike Toole (Artorius, Baker Tilly, KPMG, Skipton). Senior team members include Tom Evans (former CTO of Chip) and Joe Hodgins (former head of Lombard lending at Julius Baer).