NAV Lending for Private Equity Funds: Flexible Financing Built Around Your Portfolio

Last Updated: September 2026

Key Takeaways

  • NAV loans are structured around the net asset value of a fund’s portfolio , not traditional collateral or creditworthiness. This structure makes capital more accessible for private equity funds.
  • NAV lending is non-dilutive: no new shares, no capital calls to limited partners and no loss of ownership or control.
  • Loan amounts flex with portfolio value, and repayment terms can be structured around cash flow and investment performance.
  • Portfolio stability matters: a significant decline in asset value can trigger a default, so careful assessment of downside risk is essential before proceeding.

For private equity funds, accessing capital between realizations or during periods of portfolio growth shouldn’t mean diluting ownership or calling on limited partners. Net Asset Value (NAV) lending offers a smarter alternative built around the actual value of what your fund holds.

How NAV Lending Works

In a NAV loan, the lender evaluates the fund’s full investment portfolio, including assets, liabilities and equity, based on current market value. That net asset value determines the loan amount, rather than relying on hard assets or traditional creditworthiness assessments. This makes NAV loans particularly well-suited for private equity funds whose value lives in their portfolio companies rather than tangible collateral.

As portfolio value fluctuates, so does the loan’s flexibility. Funds can access additional capital when needed without the friction of refinancing or layering on new debt facilities.

The Case for NAV Lending in Private Equity

NAV loans give private equity funds a powerful financing lever with distinct advantages:

  • Non-dilutive capital: No new shares issued, no LP capital calls, no erosion of existing ownership or returns.
  • Flexible loan amounts: Tied to portfolio value, so capital availability moves with your fund’s performance.
  • Flexible repayment: Terms can be structured around cash flow and investment performance rather than rigid schedules.
  • Competitive rates: Because the loan is secured by portfolio assets, lenders can offer more favorable rates than unsecured debt alternatives.

Funds can deploy NAV loan proceeds across a range of strategic needs from supporting portfolio companies and financing follow-on investments to managing liquidity during the hold period or bridging to a future exit.

What to Consider Before Moving Forward

NAV loans are generally lower risk than unsecured debt because they’re backed by portfolio value, but that backing cuts both ways. If the fund’s portfolio declines significantly in value, it can trigger a loan default, potentially giving the lender the ability to take control of assets or force a sale at an unfavorable time. Before proceeding, funds should carefully assess portfolio stability, concentration risk, and potential downside scenarios, and review all loan terms with appropriate counsel.

Eligibility Requirements

Before applying for a NAV loan it’s worth understanding what you’ll need to qualify. Eligibility criteria can vary from lender to lender, however, some common metrics lenders evaluate include:

  • The business’s minimum net asset value
  • A proven track record of profitability
  • Management of the business
  • Stability of the business and its industry
  • Jurisdictional restrictions

Ready to explore NAV lending for your fund?

Customers Bank’s experienced team understands the complexities of fund and specialty financing and is ready to help you find the right structure for your fund’s needs. Get in touch today.