Westend Bank | Credit mandate and loan fronting for companies

In an increasingly complex regulatory environment and dynamic credit markets, flexible financing models are becoming essential.

Credit mandate financing and loan fronting solutions can create efficient structures to connect capital providers and capital seekers directly with each other – in compliance with all regulatory requirements and with a focus on maximum transparency.

In the credit mandate business, credit management remains with Westend Bank after the loan has been granted, ensuring maximum security and structural integrity. In loan fronting, Westend Bank performs all functions that require a banking licence. The loan agreement and the receivable are then sold by us as a credit institution to the financier or other investors, who service and manage the loan until maturity – a solution that gives financiers additional flexibility and control.

Westend Bank provides these two modern financial solutions specifically for companies and institutional investors. In this way, we create highly professional financing structures for innovative ideas and transactions that combine return opportunities with stable risk management, minimise risks – and open up new ways of allocating capital beyond traditional bank financing.

Our Services

Personalised advisory and dedicated support from experienced financial experts

Development of customised concepts for credit mandate financing and loan fronting for companies and institutional clients

Coordination between capital providers and capital seekers, taking regulatory requirements into account

Structuring, administration and monitoring of credit mandates

Full-service including credit monitoring and reporting

Integration into existing investment and risk management strategies

Transparent documentation and legally compliant execution

Your Benefits

Efficient and modern financing structure for complex projects and transactions

Direct alignment between capital providers and capital seekers

Flexibility through selectable management models (credit mandate or loan fronting)

Strengthening liquidity and balance sheet structure

Legal compliance thanks to experienced partners and clear governance structures

Fast and streamlined processing

Discreet, personalised support with a focus on sustainability and convenience

Credit Mandate and Fronting Case Studies:

Our financing examples for companies and investors

Replacement of equity financing

Initial Situation

A group of companies develop a modern residential district comprising approximately 500 apartments and associated parking spaces on an area of 35,000 square metres. As part of the project, a finance facility agreement due for renewal needed to be replaced by outside financing that was tailored to requirements.

Financial Solution

In close coordination with the companies involved, Westend Bank structured a customised loan on behalf of the equity provider (loan provider) that was adapted to its requirements to replace the existing residual financing. The new loan agreement allowed repayment at any time without an additional early repayment penalty. The loan from Westend Bank AG was fully secured by the loan originator with cash deposits held in separate fixed-term deposit accounts and earning interest at standard market rates. The cash collateral was gradually reduced in line with the repayment of the loan and returned to the loan originator. At the same time, there was a dynamic collateral structure.

Guarantee to Cover a Deductible in Credit Insurance

Initial Situation

An industrial holding company approached Westend Bank as part of an extensive corporate reorganisation. The objective was to provide a guarantee covering a deductible from an existing credit insurance policy. The holding company already had secured financing; the guaranteed request related to a subsidiary within the group of companies. The holding company was under increasing competitive pressure and had decided to sell its operating business to the industry market leader as part of an asset deal. The remaining company was to be wound up within two years. A guaranteed solution was therefore essential to maintain existing credit insurance contracts and ensure a smooth transfer of assets.

Financial Solution

Westend Bank developed a customised guaranteed solution that fully covers the credit insurance deductible and reducing risks exposure. The underlying credit insurance policy covered receivables from goods deliveries and services provided by the corporate group to its customers – either directly or via assigned receivables. In addition to the assignment of the claims arising from the insurance, the guarantee was backed by cash from the loan originator. The guaranteed solution enabled the industrial holding company to continue its credit insurance contracts, hedge existing risks and implement the planned liquidation of the company in an orderly manner. At the same time, financial security within the Group was strengthened - a decisive factor for a successful transition as part of the asset deal.

Provision of a Loan to a Project Company via Loan Fronting.

Initial Situation

An experienced institutional investor was planning to finance a project company that was to realise a large-volume property project. The investor had sufficient liquidity and in-depth industry knowledge to determine the economic credit parameters independently. For the actual lending business, which requires a banking licence, he needed a solution that would allow him to retain economic control. For Westend Bank, as a formally regulated lender, the challenge was to ensure full regulatory compliance with the investor's economic conditions. At the same time, it was essential that the transaction had no negative impact on the bank's balance sheet, risk profile and regulatory key figures (MaRisk, CRR).

Financial Solution

Westend Bank structured the financing as a fronting transaction based on a loan agreement. For the economic parameter: Term, interest rate, covenants and collateral were specified by the investor. Westend Bank granted the loan to the project company on its own behalf but for the account of the investor, who backed the loan amount with cash before disbursement. Immediately after valuation, the resulting loan receivable was sold and assigned to the investor, meaning that Westend Bank did not assume any credit risk. This structured interaction made it possible to utilise the regulatory framework of a credit institution without burdening the bank's balance sheet. The financing was implemented on time, efficiently and in full compliance with regulations. The project company received the required funds quickly and reliably from a regulated banking institution. The investor benefited from full economic control, regulatory compliance, access to credit structures and flexible, secure and transparent process.