Borrow Like a Boardroom: Turning Strategic Lending into a Wealth Advantage

Think Like the CEO of Your Wealth

Every company needs a clear vision. A CEO’s job is to set that direction and align every financial decision to achieve it. Managing personal wealth works much the same way. When you think like the CEO of your wealth, you approach decisions, including borrowing, with purpose and strategy.

Borrowing isn’t always a sign of need. For many high-net-worth individuals, it’s a deliberate choice. Like a company balancing debt and equity, you can use lending to maintain flexibility, preserve investments, and create long-term opportunity.

Borrowing When You Don’t Have To

For affluent families, borrowing can be less about necessity and more about intention. There are three primary reasons clients choose to borrow even when they have capital available: flexibility, tax management, and return optimization.

1. Flexibility

Many clients hold wealth in illiquid or concentrated assets, such as equity in a private business, real estate, or legacy stock positions. These assets may be valuable but difficult or undesirable to sell for tax or personal reasons. A line of credit can provide liquidity without forcing liquidation, allowing you to meet short-term needs or seize new opportunities while maintaining long-term holdings.

2. Tax Management

Selling appreciated assets can trigger significant capital gains taxes under current law. Borrowing, by contrast, can provide liquidity without generating a taxable event. Often clients strategically borrow against certain investments they plan to own for a lifetime, deferring recognition of capital gain. This preserves value for the next generation with the basis adjustment that occurs at the owner’s death.  

Borrowing can also play a role in family planning. Parents may borrow against investments to fund loans to children or trusts, supporting home purchases or new ventures. These intrafamily loans are formal arrangements using IRS-approved interest rates that are lower than commercial terms, often allowing for wealth transfer without reducing the lender’s lifetime estate tax exemption.

3. Optimizing Returns

Used wisely, leverage can amplify returns. Consider an investor with a $1 million property, $200,000 in equity, and an $800,000 mortgage. A 10% increase in property value raises equity from $200,000 to $300,000 — a 50% gain. If that property also generates rental income greater than the cost of borrowing, the effect is even more powerful.

For others, borrowing may simply create breathing room, bridging lifestyle needs or business opportunities until deferred income, bonuses, or liquidity events occur.

Preserving Wealth and Seizing Opportunity

Strategic lending can also help protect investments during market volatility. Selling securities in a downturn may lock in losses, while borrowing against those investments allows you to maintain your position through recovery. Markets can take five years or more to rebound after suffering a major downturn. Disciplined investors can weather these periods when liquidity is available through accessing credit.

Access to credit also creates agility. Clients with established lines of credit can move quickly when opportunities arise, from purchasing real estate to acquiring additional investments, often acting as cash buyers in competitive markets.

Guardrails for Responsible Borrowing

Like corporate finance, personal borrowing should be guided by thoughtful analysis and discipline. Market volatility, changing interest rates, or asset depreciation can all affect repayment ability.

Maintaining conservative loan-to-value ratios, diversifying collateral, and modeling different market scenarios can help mitigate those risks. Borrowing for investment, liquidity, or opportunity can be strategic. Borrowing for lifestyle consumption without a repayment plan is not.

A comprehensive financial plan helps model both paths, using existing capital versus borrowed funds to evaluate the impact on long-term goals, risk tolerance, and after-tax outcomes. The goal is to move away from how we were taught to think about debt emotionally, and instead view it objectively — the way a CEO would.

A Broader View of Success

Not every goal is purely financial. For some, values and legacy play just as strong a role in decision-making as numbers do. Integrating personal priorities, from philanthropy to environmental values, into your financial plan ensures that borrowing decisions reflect not only what you want to build, but also what you stand for.

How Hancock Whitney Wealth Management Can Help

Sophisticated wealth strategies incorporate debt not as a burden to, but as a component of a well-structured balance sheet. At Hancock Whitney, our wealth team collaborates to help clients model borrowing scenarios, evaluate tax impacts, and align every financial decision with long-term goals.

By combining financial foresight with personalized planning, our team helps clients think like the CEO of their wealth — balancing flexibility, discipline, and opportunity to build enduring prosperity for generations.

The information, views, opinions, and positions expressed by the author(s), presenter(s), and/or presented in the article are those of the author or individual who made the statement and do not necessarily reflect the policies, views, opinions, and positions of Hancock Whitney Bank. Hancock Whitney makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented.

This information is general in nature and is provided for educational purposes only. Information provided and statements made should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Hancock Whitney Bank encourages you to consult a professional for advice applicable to your specific situation.

Hancock Whitney offers investment products, which may include asset management accounts, as part of its Wealth Management Services. Hancock Whitney Bank is a wholly owned subsidiary of Hancock Whitney Corporation.

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