Securities-Based Line of Credit
Guidelines |
The Securities-Based Line of Credit program allows the borrower to
pledge their securities portfolio (stocks, bonds
and other securities) to obtain a Revolving Line Of Credit for personal or business use.
The borrower maintains their portfolio in an SIPC-insured account at a top-tier US Bank/Investment firm. There is no liquidation of the assets and the borrower
may still trade or sell their securities. (Some restrictions may apply.)
|
Overview |
|
Type of Loan: |
Revolving Line of Credit |
|
Interest Rates: |
See chart below |
|
Loan to Value: |
See chart below |
|
Loan Terms |
Loans are perpetual. Fixed rate loans are
where the RATE is fixed for the term chosen by the borrower.
6 months to 7 years are available. |
|
Payment Structure: |
Interest-Only monthly loan payment. No
payment is due if the borrower's credit line exceeds the amount of the
funds drawn on the account. |
|
Minimum Loan Amount: |
$100,000. |
| Maximum Loan Amount: |
Based on the securities pledged. Note -
We will not consider more securities to be
pledged than the total of 3 day average volume. |
| Minimum Trading Volume: |
$50,000 average daily trading volume. |
|
Credit Check: |
None |
|
Income
Verification: |
None |
|
Pre-Payment Penalty: |
ARM's, No. Fixed Rate, Yes* |
|
Lock Out Period: |
None |
|
Recourse: |
Limited recourse. Assets pledged
may be liquidated to payoff the credit line. |
|
ARM Conversion: |
Credit lines
may be converted to a fixed rate at any time with no cost. |
|
Upfront Fees: |
None |
|
Yearly Maintenance Fee: |
None |
|
Insured Account: |
Yes - SIPC-insured |
|
Call Point: |
Borrower must maintain at 25% equity in
the account at all times. |
| *The Fixed Rate Lines of Credit and Loans carry a breakage fee. Please
call for calculation and example as this is a sliding scale. |
Loan To Values
| Collateral |
Loan-To-Value Available |
| US
Stocks ($10 a share minimum) |
up to 65% |
| Mutual
Funds ($5 as share minimum) |
up to 65% |
| US
Treasuries |
up to 99% |
|
Foreign Stocks |
up to 65% |
| Restricted
Stock |
up to 60% |
|
MTN's (Investment Grade) |
up to 95% |
|
Foreign Sovereign Debt (Investment Grade) |
up to 95% |
| Corporate Bonds (Investment Grade) |
up to 90% |
|
Municipal Bonds |
up to 90% |
|
US Restricted Stock |
up to
60% |
| CD's |
up to 85% |
|
Adjustable Rates |
| Loan Amount |
Estimated Interest Rate |
| 100k to
250K |
4.50% |
| 250k and
500K |
4.25% |
| 500K and
1M |
4.00% |
| 1M+ |
call |
|
Fixed Rates* |
|
Loan Amount |
Margin |
Est. Rate 2yr |
Est. Rate 3yr |
Est. Rate 5yr |
|
100k to 250K |
5.00% |
5.875% |
6.25% |
7.25% |
|
250k and 500K |
4.00% |
4.875% |
5.25% |
6.25% |
|
500K and 1M |
3.00% |
3.875% |
4.25% |
5.25% |
|
1M+ |
call |
call |
call |
call |
|
* Rates are based upon a margin over the
corresponding term of the LIBOR Swaps index. Lines of Credit may be converted to
a fixed rate at any time at no cost. |
| Acceptable Collateral |
• Stocks, ETF(s) and mutual funds ($10 or higher)
• US Treasuries
• Foreign Sovereign Debt (AAA+ - AA-)
• MTN's
• Investment Grade Bonds
• Municipal Bonds
• Control or Restricted Stock |
|
|
Unacceptable Collateral |
• 401(k)'s, IRA's or any type of retirement fund
• Real Estate
• Annuities
• Gold or silver mines
• Mines or Mining Projects
• Oil or Gas Leases
• Commodities
• Private notes or private bonds
• Bonds that are past maturity
• Bonds that are backed by gold
• Bearer Bonds
• Variable Structure Notes
• Surety Bonds or any type of insurance instruments
• Gems
• Private Notes
• Art
• SKR's
• Leased Instruments
• BG's
• SBLC's
• Stocks or Bonds originating in the following countries:
Africa, Bolivia, Greece, India, Iran, Iraq, N. Korea, S. Korea, Mainland China, Malaysia, Nigeria, Pakistan, Peru, Portugal, Romania, Russia,
Spain, Sri Lanka, Taiwan, Thailand, Venezuela. |
|
If you have any questions about what qualifies please contact us.
|
