Securities-Based Lines of Credit (SBLOCs)
The Financing Alternative Savvy Buyers Are Using to Win Deals
Securities-Based Lines of Credit (SBLOC)
SBLOCs are revolutionizing real estate purchase funding, offering unmatched speed, flexibility, and efficiency without liquidating investments or triggering taxes.
Securities-based loans totaled $138 billion, or 2.7 percent of total outstanding consumer credit.*
how sbloc financing can give you a competitive edge
Savvy real estate buyers understand that the right financing strategy can help them act fast, stay competitive, and preserve their wealth.
The Advantages of SBLOCs
An SBLOC is a non-purpose loan that allows you to borrow against eligible investments in your portfolio. It offers the speed and flexibility to secure luxury homes, investment properties, or second homes—without compromising your long-term financial strategy.
- Fast Access to Funds: Liquidity in as little as 5-7 days.
- Cost-Effective Rates: Competitive interest rates compared to traditional loans.
- Tax-Efficient: Avoid triggering tax implications.
- Flexible Payments: Pay interest only, with no fixed monthly payment requirements.
| Feature | SBLOC | Portfolio Withdrawal | Traditional Mortgage ** | Second Home Mortgage | HELOC *** |
|---|---|---|---|---|---|
| Speed Of Access | 5-7 Days | Immediate | 30-60 days | 30-60 days | 15-30 days |
| Interest Rates | Competitive (variable or fixed) | N/A | 5%-7% | 5%-8% | 7%-9% |
| Tax Implications | None | Avoid Tax Implications | None | None | None |
| Credit Requirements | None (portfolio-backed) | None | High | High | High |
| Use Flexibility | High | Low | Low | Low | High |
| Payment Flexibility | High | N/A | Low | Low | Moderate |
| Fees | No application, origination, or annual fee | Possible | Yes | Yes | Yes |
SBLOC Success
“We keep losing deals to all-cash offers.”
Transform your offer with SBLOC financing. Secure liquidity in days and act fast in competitive markets.
“Our dream home is slipping away due to sales contingencies.”
Use an SBLOC to buy your next home without the stress of selling your current one first.
“We’d like to buy a vacation property but don’t meet the mortgage requirements.”
SBLOCs offer freedom from stringent requirements, making your second home attainable.
NEXT STEPS
Loans can carry risks. Consult your financial advisor to determine if an SBLOC is right for you.
- Ask Your Financial Advisor: Assess SBLOC eligibility and alignment with your goals.
- Determine Your Borrowing Amount: Most SBLOCs allow borrowing up to 65% of your portfolio value.
- Compare Financing Options: Evaluate SBLOCs alongside traditional loans and HELOCs.
- Apply and Access Funds: Once approved, your funds are available when needed.
LEARN MORE
Unlock the power of your portfolio to fund your next real estate purchase.
Frequently Asked Questions
Here are some general questions to help you assess if an SBLOC is suitable for your upcoming real estate requirements. Share with your financial advisor to learn more.
Start with your financial advisor, or wealth management professional to assess your SBLOC eligibility and alignment with your goals.
Your financial advisor will then determine the most suitable steps for you to establish your own SBLOC, utilizing their established relationship with their preferred bank.
SBLOCs use non-qualified investment accounts as collateral, such as brokerage or trust accounts holding stocks, bonds, ETFs, or mutual funds. Retirement accounts like 401(k)s and IRAs are ineligible.
Consult your financial advisor to determine if an SBLOC is right for you.
Typically, around 60-70% of your eligible portfolio’s value. For example, a $3 million portfolio may allow you to borrow up to $1.95 million.
Consult your financial advisor to assess your eligibility and determine your borrowing amount.
Yes! Establishing an SBLOC ensures immediate access to funds for time-sensitive opportunities.
Consult your financial advisor to determine if an SBLOC is right for you. They can help determine if establishing an SBLOC ahead of time aligns with your overall wealth management strategy and personal circumstances.
SBLOCs provide remarkable flexibility and can be utilized for a variety of purposes. They allow you to quickly secure luxury residences, investment properties, or second homes without jeopardizing your long-term financial goals. Common applications include financing the purchase of primary and vacation homes, undertaking renovations, and addressing cash flow shortfalls.
Consult your financial advisor to discuss all of the use cases that would be applicable to your overall wealth management strategy and personal circumstances.
Are you ready for your next real estate purchase?
Contact your Financial Advisor today, to begin the process in discussing whether an SBLOC is right for you and your upcoming real estate needs.
SHARE WITH YOUR FINANCIAL ADVISOR
Securities-based lending is a non-purpose margin loan secured by eligible, marketable securities. It is non-purpose because the proceeds of the line of credit cannot be used to purchase or carry securities. Securities-based lending has special risks and is not suitable for all investors. The risk of securities-based lending include: (i) market fluctuations that may cause the value of pledged assets to decline, (ii) a decline in the value of the pledged securities that could result in selling the securities to maintain equity, and (iii) possible adverse tax consequences as a result of selling securities. Fluctuations in market interest rates could also affect the applicable index rate that applies to your line of credit causing the cost of the credit line to increase significantly. The interest rates charged on lines of credit backed by securities are determined in part by the line of credit amount as outlined in the loan documents.
TriState Capital Bank is a Pennsylvania chartered bank.
** https://www.freddiemac.com/pmms
*** https://www.bankrate.com/home-equity/heloc-rates/
