NAV Loan (NAV Facility)
A loan a private equity fund borrows against the net asset value of its whole portfolio, rather than selling any of it, to free up cash for distributions.
A NAV loan (also called a NAV facility) is debt a private equity fund takes out against the current value of everything it holds, rather than against any single portfolio company. The lender advances cash based on the fund's own marks; the fund uses that cash to pay distributions to its investors without selling a stake in anything.
That is the appeal: a sponsor sitting on assets it isn't ready to sell can still return cash to limited partners who are asking for liquidity. It is also the criticism. A sale forces a buyer and seller to agree on a price, which tests whether the fund's marks reflect what the portfolio is actually worth. A NAV loan borrows against those marks without ever testing them, and the loan still has to be repaid, ideally from a real exit rather than another loan on top of it.