The hidden balance sheet: Finding more liquidity opportunities

We’ve observed over the years that many families with institutional-sized wealth have more borrowing capacity than they realize. This is because their family offices have long chosen liquidity plans from a familiar menu of options: Sell assets, take out a traditional loan or borrow against a securities portfolio. Today, this defines borrowing capacity too narrowly.

While those tools remain useful, modern lending can now involve a much broader range of assets—private company stakes, private funds, real estate and other tangible holdings. However, your family office can only use this borrowing capacity if it is aware of it. Closing the gap between imagined capacity and real capacity starts with understanding what the full balance sheet can support—and doing so before liquidity is needed.

A convergence of forces

While the range of assets family offices can borrow against is expanding, several forces are making that borrowing capacity harder to identify.

First, market volatility has made it harder to time asset sales strategically. In J.P. Morgan Private Bank’s 2026 Global Family Office Report, which surveyed 333 single-family offices across 30 countries, 46% of respondents identified financial market disruption as the greatest threat to their long-term goals. Selling a concentrated equity position in a family enterprise or an investment property can lock in losses, trigger taxes or give up future upside. Borrowing against a broader balance sheet helps separate liquidity needs from market timing.

Further, family structures are also becoming more complex. The average family office now serves 2.4 generations and 5.5 households and supervises more than $1.1 billion in assets—and nearly six in 10 have a separate operating business. Capital may sit across trusts, holding companies, operating businesses and family entities. These structures can only support borrowing when ownership, control and cash-flow rights are clear enough to underwrite.

That complexity will likely increase as wealth transfers accelerate. In the U.S. alone, an estimated $124 trillion is expected to pass from Baby Boomers and the Silent Generation to their heirs (and philanthropic causes they support) by 2048.¹ A lending strategy designed for an individual looks very different from one built for a multi-generational family office with assets spread across entities and jurisdictions.

In many cases, borrowing capacity is shaped less by asset value alone than by how those assets are organized.

Portfolio construction adds another layer. Our survey found that private investments now represent nearly 31% of family office allocations globally, and 37% of family offices plan to increase private equity exposure over the next 12 to 18 months. With illiquid holdings growing as a share of wealth, a smaller proportion of the balance sheet will be available for traditional securities-based lending, and families and their family office may need to assess more of their illiquid holdings through a lending lens.

The mechanics of modern lending

Borrowing against a diversified balance sheet requires underwriting assets with different risk profiles, legal structures and operational considerations.

A private company stake may represent significant wealth on paper, but lenders focus on wealth that can be realized. Distribution history, shareholder agreements, transfer restrictions and the path to liquidity all shape that assessment. Where cash flows are irregular or ownership rights are constrained, lendable value can fall well below what business-owning families expect.

Tangible assets raise a different set of questions. While a credible appraisal on an art collection or aircraft is a starting point, lenders will also consider title, provenance, insurance and market depth before determining what can actually be borrowed against.

Borrowing capacity is easiest to establish before an urgently need arises. Families that wait until capital is already required—for a capital call, a property purchase or an estate event— often find that documentation and approvals become the bottleneck. Mapping assets, testing eligibility and resolving structural constraints takes time that a deadline rarely allows.

Navigating the decision

1. For families considering balance sheet lending, the starting point is not a credit product. It is a clearer view of what they own. We suggest considering these three steps: Understand the true composition of the family’s assets.
   
   When making allocation decisions about their investment portfolios, we’ve found that a majority of business-owning families do not consider their operating company as part of their overall holdings. That can pose risks to overall exposure and make it difficult to accurately align borrowing capacity with long-term goals. A more integrated view of the balance sheet—one that incorporates both liquid and illiquid holdings—can help families and family offices better calibrate their borrowing strategy.
2. Treat governance as part of the credit structure. With 86% of family offices lacking clear succession plans for key decision-makers,² authority over capital cannot be assumed. Who can draw on a facility? Which entities should be involved? What approvals are required? These questions are far easier to address before liquidity is needed than during a market disruption or transaction deadline.
3. Regard the choice of lending partner as a matter of importance. When family offices evaluate external advisers, trust, values and alignment are critical considerations. When it comes to lending, that alignment shows up in the lender’s ability to structure financing across entities, coordinate across jurisdictions and remain consistent through market cycles. In complex situations, the cheapest capital is not always the most dependable.

We believe families should resist the temptation to over-leverage. Our report found that 31% of family offices hold at least 10% of their assets in cash. While this may not be optimally efficient, it serves a purpose—protection against forced sales and timing risk. A durable liquidity strategy balances cash, committed facilities and diversified collateral so that no single constraint determines the outcome.

Conclusion: Liquidity is a discipline

The family offices navigating liquidity most effectively are not necessarily those with the largest balance sheets. They are the ones that understand how much of their balance sheet they can actually use. This will become increasingly important: As allocations to private market assets grow and wealth moves across generations, the gap between what families own and what they can access is likely to widen.

Families that evaluate their assets in isolation risk having to make avoidable trade-offs: They may sell at the wrong time, pass on opportunities or hold excess cash because they have not planned for liquidity in advance.

The hidden balance sheet is a reminder that liquidity is a discipline that requires knowing what you own, where it sits, who controls it and how quickly capital can be accessed. The advantage for family offices does not lie in taking out more leverage, but in facing fewer forced decisions.

We can help

To learn more about the liquidity options that may be available to you and your family office, and how they can be used in service of your goals, contact your J.P. Morgan team.