When a founder sells their business and suddenly finds themselves with significant liquidity, it’s natural to assume they no longer need to borrow. After all, if you’ve just banked millions from an exit, why take on debt when you could simply pay cash?
The reality is more nuanced. Many high-net-worth founders choose to finance major purchases or investments even after a successful exit. Here’s why.
- Preserving Liquidity
A business exit often shifts wealth into assets that aren’t instantly available as cash — such as shares in the acquiring company, deferred consideration, or earn-outs. Even when liquid, many founders prefer to keep capital flexible rather than tied up in one large purchase. A loan allows them to maintain liquidity for new opportunities while still securing what they need today.
- Tax Efficiency
Using leverage can provide tax advantages. By financing through a loan secured against assets (such as shares), a founder may avoid triggering capital gains tax or unnecessary tax events. Instead of selling down equity to free up cash, they can borrow against it, keeping their portfolio intact while potentially benefiting from future growth.
- Opportunity Cost
Wealthy individuals often have investment opportunities that generate strong returns — sometimes higher than the cost of borrowing. By taking a loan, a founder keeps their capital invested where it can continue to work for them, rather than locking it into a non-income-producing asset.
- Confidentiality and Discretion
Exiting a business doesn’t always mean going quiet. Some founders prefer to move quickly, discreetly, and without signalling large disposals of equity. Borrowing against existing assets enables them to fund new ventures or purchases without broadcasting a major sale or liquidation of holdings.
- Diversification and Risk Management
Borrowing allows founders to spread risk. Instead of concentrating their own capital in a single illiquid purchase — whether that’s property, aircraft, or a new business venture — they use structured lending to balance personal exposure while maintaining a diverse portfolio.
- Strategic Leverage
Ultimately, debt isn’t just about need. It’s about strategy. Many of the wealthiest individuals in the world use leverage even when they could purchase outright. It allows them to control larger assets, move quickly on opportunities, and preserve the upside of their existing investments.
A successful exit may create wealth, but smart founders think beyond the headline number. Using share-backed or asset-backed loans enables them to preserve liquidity, enhance tax efficiency, and stay strategically positioned for future opportunities.
If you’ve recently exited and are considering your next move, a tailored lending solution could help you achieve your goals without compromising your long-term strategy.
📩 To discuss how structured lending could fit into your wealth strategy, start a confidential enquiry today