A Lombard loan is a loan secured by assets such as cash and capital market instruments, such as equities, bonds or fund units. These assets are deposited with the lender and are taken as collateral for your loan. A Lombard loan may be used for reinvestments in products and services, such as securities, or for liquidity needs.
When used for reinvestment, a Lombard loan may create a leverage effect that may enhance the return on your investment, but this also implies a higher risk of loss. A Lombard loan can also be used for liquidity needs, for example to purchase goods or services.