Securities-Based Lending: How It Works
Sound complex? It's simpler than you think.
Securities-based lines of credit allow borrowers to access cash without liquidating their investment portfolios. The portfolio serves as collateral — qualified equities, bonds or funds that are already owned. Principal can be re-paid at any time during the life of the loan — only interest is due monthly. Or, if opening a Select Savings Account, contact your regional banking director.
Borrower applies for a line of credit online.
1. Apply We'll need a few facts to help clients get started: loan size, collateral accounts and some applicant information.
Collateral is pledged with non-retirement assets.
2. Pledge These are a client's assets that secure the loan. The values of the account holdings are available real time for easy and ongoing management.
Loan documents are reviewed and signed. That's it.
3. Sign All documentation is securely delivered and can be digitally reviewed, signed and submitted.
The Not-So-Fine Print: Securities-Based Lending Loan Features
Size: From $75,000 to $25 million, with advances starting at $2500
Use: Any purpose other than purchasing, carrying or trading margin stock
Facility Type: Revolving line of credit; clients can borrow, repay, and re-borrow multiple times
Collateral: Non-retirement investment assets, including stocks, bonds, mutual funds, and exchange-traded funds
Interest Rate: 1-Month Term SOFR plus a spread determined by loan amount, reset monthly
Repayment: Interest only, payable monthly; principal can be repaid at any time without penalty
Term: There is no maturity date; repayment can be demanded at any time
Fees: No application, origination, or annual fees
Documents: No personal financial statements, tax returns, or paper applications
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