Securities-Based Line of Credit
Features and Benefits of Securities-Based Lending
Access liquidity without disrupting your investment strategy.
When you need liquidity to take advantage of new opportunities or meet unplanned expenses, you may not want to disrupt your carefully designed investment portfolio or access a trust. Let our team help you address your short-term liquidity needs with a solution that may complement your overall wealth plan.
How Does a Securities-Based Line of Credit Work?
A securities-based line of credit (SBLOC) offers quick access to liquidity by leveraging your eligible securities as collateral. By leveraging rather than liquidating a portion of your portfolio, a securities-based loan can provide funding for a wide variety of personal or business needs while keeping your overall investment strategy intact.
Flexible, on-demand liquidity
You can draw on funds any time you need them
Tied to attractive Secured Overnight Funding Rate, or SOFR, and a simple, streamlined application process without fees or closing costs
Keep more of your assets working for you without disrupting your long-term strategy
Here are some of the potential ways securities-based lending can work for you:
- Making a significant purchase, such as artwork or other collections, real estate, aircraft, or marine craft
- Funding your annual gifting
- Meeting unexpected large expenses such as tax liabilities
- Acting as a bridge to permanent financing
- Financing business ventures, mergers, and acquisitions
- Paying for wedding expenses, home renovations, college tuition
Personalized attention integrated with your overall wealth plan
Our Private Bankers and Wealth Management professionals can work closely together to assess your lending needs in conjunction with your wealth plan. We can carefully assess your overall plan and evaluate options before recommending appropriate strategies.
Credit is being offered by M&T Bank, member FDIC. The credit offering requires an investment account at M&T Bank, Wilmington Trust Company, Wilmington Trust N.A., and/or LPL Financial LLC and sufficient eligible collateral to support a credit facility of the applicable loan amount. M&T Bank, Wilmington Trust Company, and Wilmington Trust, N.A. are affiliated, but are separate entities. LPL Financial is a third-party broker-dealer and is not affiliated with any M&T Bank or Wilmington Trust entity. Pursuant to a Networking Agreement between M&T Bank and LPL Financial, LPL Financial offers services on the premises of M&T Bank. Neither M&T Bank, Wilmington Trust Company, Wilmington Trust, N.A., nor LPL Financial is responsible for the products and services of each other.
Borrowing with securities as collateral involves certain risks and is not suitable for everyone. A complete assessment of your individual circumstances is needed when considering a securities-based loan. You should review both the Securities-Based Lending Program Credit, Security and Guaranty Agreement and the Disclosure, Waiver of Conflict of Interest, Acknowledgment and Release carefully with your legal and tax advisors. Also consider the following:
- Credit secured by marketable securities can increase your level of market risk.
- The downside is not limited to the collateral value in your pledged account.
- Assets held in your accounts may lose market value or may be afforded less collateral value by the lender at any time, resulting in a collateral call.
- The collateral maintenance requirements can be increased at any time, which may result in a collateral call, and the lender is not required to provide you with advance written notice.
- You are not entitled to an extension of time on a collateral call.
- An increase to the variable interest rate will result in a higher periodic payment required and, if you are unable to make the higher periodic payment, could result in a collateral call.
- The sale of any securities in your account may be initiated, without contacting you, to meet a collateral call.
- Your ability to withdraw assets will be subject to the consent of the lender.
- The sale of your pledged securities may cause you to suffer adverse tax consequences. You should discuss the tax implications of pledging securities as collateral with your tax advisor. Neither M&T Bank Corporation, nor any of its subsidiaries, affiliates, or advisors, provide legal, tax or accounting advice. You should consult a legal and/or tax advisor before making any financial decisions.
All securities and accounts are subject to eligibility requirements. Certain restrictions and terms and conditions apply. Tax deferred assets are not eligible. Financing real estate with a securities-based loan or line of credit carries risk and may not be appropriate for your needs. Securities held in a retirement account cannot be used as collateral to obtain a loan.