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Securities-Backed Line of Credit (SBLOC)

Securities-Backed Line of Credit (SBLOC)

October 07, 2021

We’ve fielded several questions around available options for lending or cash liquidity this year. Several choices include personal loans, Home Equity (HELOC), or a cash out refinance. One possibility that some may not be aware of is called a securities-backed line of credit (SBLOC). The name is somewhat intuitive in that individuals can borrow funds and use securities invested in a brokerage account as collateral on the loan. An investor can borrow about 60% of assets held in a brokerage account. These are non-purpose loans, meaning you can use them for almost anything except the purchase and trade of other securities. As a revolving line of credit, you can borrow and payoff balances as you like, and are only required to pay interest-only on a monthly basis.  IRAs and qualified plan accounts are not eligible to utilize an SBLOC.


  • Growth - continue investing and receiving benefits of dividends or appreciation of securities
  • Non-purpose loan - can use for taxes, real estate purchases, auto loan, etc.
  • Flexibility – interest-only payments due monthly and can payoff balances whenever you decide
  • Taxes – this option may allow an investor to avoid capital gains taxes that otherwise would’ve been incurred while selling securities to fund their short-term needs
  • Interest rates – typically lower than a personal loan with the option of fixed or variable rates


  • Decrease in Collateral
    • Maintenance Call – if collateral drops below a specified level the bank will require the investor to replenish the amount
    • Sale of securities – if the investor cannot replenish the collateral, the bank could liquidate securities
  • Debt – any form of debt has its risks, and SBLOCs are no different. A strategy for repayment is necessary for any outstanding balance

Let us know if you have questions and if you’re interested in developing a strategy to leverage your assets.


Matt and Andrew

** Securities-based lending has special risks and is not suitable for everyone. If the market value of your pledged securities declines below required levels, you may be required to pay down your loan or line of credit or pledge additional eligible securities in order to maintain it, or the lender may require the sale of some or all of your pledged securities. The sale of your pledged securities may cause you to suffer adverse tax consequences.