The Securities-Based Line of Credit (SBLOC) program allows the borrower to pledge their securities portfolio (stocks, mutual fund s, bonds and other securities) to obtain a Revolving Line Of Credit for personal or business use.
The borrower's securities remain in their name and are transferred into the borrower's SIPC-insured account at a top-tier U.S. Bank/Investment firm. There is no liquidation of the assets. The borrower receives the benefits of the securities such as dividends (if applicable) and market value. The borrower may trade and/or sell their securities. (Some restrictions may apply as the securities are the collateral for the loan.)
The SBLOC program allows flexibility to draw funds up to the credit line limit and to repay any amount at any time without penalty. The funds may be used for any purpose except to purchase other securities.
Interest rates as low as 2.50% with no yearly maintenance fee and low interest-only monthly payments. (Payments are not required if there is room on the line to cover the interest due for that month.)
There is no credit or income requirements or verification and the only collateral for the loan are the securities that are pledged.
Loans available for up to 70% of the securities value and up to 99% for certain other types of securities.
Securities that qualify for SBLOC are US stocks, mutual funds, bonds, (corporate and municipal), US Treasuries, CD's and certain annuities.
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