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.
Collateral is pledged with non-retirement assets.
Loan documents are reviewed and signed. That's it.
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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