What a Securities-Backed Line of Credit Is
A securities-backed line of credit (SBLOC) lets you borrow against your investment portfolio's value without selling holdings. It can provide liquidity for a property purchase, bridge financing, or other needs while your investments stay invested.
Who It's For
- Investors wanting liquidity without selling assets
- Buyers needing fast, flexible funds for a purchase
- High-net-worth borrowers managing tax-efficient liquidity
- Those bridging timing between transactions
How It Works
Your eligible securities serve as collateral for a revolving line, typically at a percentage of the portfolio's value. You keep ownership of your investments and their potential growth. Because markets fluctuate, these lines carry the risk of a maintenance call if value drops — a key consideration we'll walk through.
Frequently Asked Questions
How much can I borrow against my portfolio?
Typically a percentage of your eligible securities' value, varying by the type of holdings and lender. Conservative holdings often allow higher borrowing percentages.
What happens if the market drops?
A significant decline can trigger a maintenance call requiring you to add collateral or pay down the line. This risk is the main consideration with securities-backed borrowing.
Do I have to sell my investments?
No — that's the point. You keep your portfolio invested and borrow against it, preserving potential growth and avoiding a taxable sale.