The Liability Side of the Family Office

Ask a family office for its asset allocation, and you will usually have an answer within the hour. Ask for a single list of every loan the family has taken, who guaranteed it, when it falls due and what happens if one lender calls it in, and the answer can take weeks.

Family offices have spent a decade hiring investment professionals and adopting institutional reporting. The liability side has not kept pace: borrowing is still treated as a transaction to solve when a purchase needs funding, not a position to govern.

In nearly twenty years of arranging finance for international mobile families, I have seen more damage from poorly organised debt than from poorly chosen investments. The debt is rarely reckless. It is simply unowned.

Where family debt sits

In a typical multi-generational family, leverage sits in at least four places: the mortgage on the London house, often in the principal’s own name; loans inside property companies or trusts, sometimes offshore; debt in the operating business that created the wealth; and facilities secured against investment portfolios, which can be drawn quietly and forgotten.

Each was arranged for a sensible reason, by a different adviser, at a different time, and few appear in the same report. The investment committee sees the portfolio, the company’s finance director sees the business facility, and the private bank sees only its own exposure.

No single person sees the balance sheet whole, and the loans are rarely independent. A personal guarantee given to a property company ties the principal to that company’s fortunes. A securities-backed facility ties the family’s liquidity to the markets.

What lenders see

Families often assume their wealth speaks for itself. Lenders underwrite something narrower: who the borrower legally is, what income can be evidenced, how liquid the family is, and how the loan will be repaid.

The structures that work best for tax, succession and privacy are often the ones lenders find hardest to accept. At Enness Global, of the 500 lenders we classify as active or verified alternatives in our proprietary database, 47 had recorded appetite for offshore structures or trusts as of October 2026. That is fewer than one in ten, and 33 of them are private banks or private bridging lenders. Even among the 77 lenders active in large loans, only 21 also record appetite for trust or offshore borrowers. *

Income is similar. Of 116 residential lenders whose published criteria we reviewed in September 2026, 41 state that they accept complex income such as bonuses, dividends or partnership drawings. **

* / ** — Source: Enness Global Lender Database, October 2026.

These figures reflect recorded appetite at a point in time, not any lender policy on a specific case. But the direction is clear. The more sophisticated the structure, the smaller the pool of willing lenders, and the more the terms depend on which lender is approached and how the case is presented.

The cost of having no policy

Unowned debt rarely fails dramatically. It costs families quietly.

Guarantees outlive their purpose. A principal guarantees a company loan to close a deal. Years later the company changed hands within the family, and nobody has revisited the exposure.

Refinancing cliffs form. When several facilities fall due in the same year, or one falls due as markets tighten, the family negotiates weakness. Lenders can tell when a borrower needs them more than they need the borrower.

Concentration builds. Many families borrow everything from the private bank that manages their money, because it is easy. That works until the bank changes its appetite, ownership, or risk limits. With so few lenders open to trust and offshore borrowers, losing one relationship can close off much of the realistic market.

Succession exposes gaps. When control passes to a new generation, the debt passes with it, often without any record of why it was arranged or what it is linked to.

A debt policy for the family office

The answer is not to borrow less. Used well, debt preserves liquidity and lets families act quickly. The answer is to govern borrowing with the discipline already applied to investing, which means five things.

One register. Every facility, guarantee and security interest across the family, its companies and trusts, with maturities, covenants and the entity that owes the money. If the office cannot produce it within a day, that is the first task.

A named owner. One person, in the office or a trusted adviser, is accountable for the liability side as a whole. Without one, the register goes stale within a year.

A written policy. It sets out how much leverage the family will carry and against which assets, whether personal guarantees are permitted and, on whose authority, and how much reliance on any single lender is acceptable. It belongs alongside the investment policy statement, approved by the same people.

A refinancing calendar. Look at least two years ahead, stagger clustered maturities deliberately, and start lender conversations while the family still has choices.

Structure is decided with lending in mind. Before choosing a new trust, holding company or jurisdiction, ask how it will affect the family’s borrowing. A structure that saves tax but shuts out most lenders may cost more than it saves.

None of these require new technology or a large team. It needs only the decision to treat borrowing as governance rather than a series of transactions.

Owning both sides of the balance sheet

Family offices have become institutional about investing. The next step is to do the same for borrowing. Those that do will refinance on their own timetable, choose between lenders rather than accept whoever will take the case, and hand the next generation a balance sheet it can understand. The assets have an owner. The liabilities deserve one too.