A securities Based lending (SBL) is a loan that uses your investment portfolio as collateral. Rather than selling your stocks or bonds for cash, borrow against them and use the funds for whatever you need. Securities-based lending offers many benefits to investors, including low-interest rates, flexible repayment terms, and the ability to retain ownership of assets.
So in this article, we will discuss all the benefits of securities-based lending.
There are many reasons to consider using your investment portfolio to secure a non-recourse loan, especially if you have a high value of securities.
Securities-backed loans typically charge lower interest rates than other types of loans that are unsecured. Clients are able to leverage their securities rather then liquidate to receive low interest rates. The rate is usually fixed with our lenders based on an index rate such as the 30-day London Interbank Offered Rate, and the lender generally tacks on a few additional points. These fees are much lower then a traditional bank loan or unsecured loan.
You are able to secure the loan with many forms of securities from listed public shares of stock, a mutual fund or portfolio of shares, bonds, notes, warrants and even digital assets.
In most cases, you can get funds from a securities-based loan in just 2-4 weeks. The other options to receive funds quickly involve Hard Money Loans, Unsecured Loans, Merchant Cash Advance Loans, Home Equity loans but interest rates on these types of loans are much higher. You can also turn to your credit cards for liquidity but if your credit is not up to par then your interest rates could be too high.
Instead of selling your securities to obtain the capital you need you are able to leverage your securities while maintaining ownership of your assets. This precludes the need to sell and potentially pay capital gains tax. This is also a tax benefit as you are taking out and repaying a loan versus just liquidating your positions.
The only recourse on these loans are the securities itself. There no personal guarantees or credit checks needed as your securities are what bases your terms. So if you have a poor credit history or no other personal items to secure the loan it is still possible to get a low-interest loan.
In conclusion, securities-based lending offers various benefits for investors who are looking to unlock the power of their investments. With low-interest rates, flexible repayment terms, and the ability to retain ownership of assets, SBL provides a valuable financial resource for those who are in need of cash.
So, If you are interested in securities-based lending then work with a reputable stock loan provider like Worldwide Stock Loans and get the best possible outcome.