Will the securities stay in my name?
Will I continue to receive dividends?
Who retains title to my securities during the loan term?
Are my securities sold at any time?
What if my account currently has a lien against it?
What is the minimum and maximum loan amount?
What is the minimum share price for my stock to qualify for this program?
Will this loan be reported to any of the credit bureaus?
Are these Full-Recourse loans?
How are the loans repaid?
What are my payment options?
Must I make a payment monthly?
Are fixed interest rates offered on these loans?
Will I receive monthly statements on my account?
What happens if I default on the loan?
What is the penalty for pre-payment on the fixed rate product?
What is the term of the loan?
Is there a Yearly Maintenance Fee?
How long will it take to set up this loan?
What is the time frame on access to the loan proceeds?
Will this program work for 401k's or IRA's?
Can you lend against annuities?
Is there a minimum trading volume per day on the securities to qualify?
In pledging CD's how does that work?
Are stocks the only collateral that may be pledged?
Is this a "margin loan"?
How is this loan program different from a "margin loan"?
What is the Call point?
Once the funds are moved what restrictions are placed upon trading?
Is there a restriction on the use of the loan proceeds?
Would this be classified as a taxable event?
Who is the lender?
How long has the lender been in business?
Why must I move my account from my current brokerage firm?
What is the difference between SBLOC and SBL Products?
How Can I Get A Quote?

Q. Will the securities stay in my name?
A. Yes. The securities pledged stay in the client's name in an SIPC-insured account.

Q. Will I continue to receive dividends?
A. Yes. If the pledged securities generate dividends they will be credited to the client's account.

Q. Who retains title to my securities during the loan term?
A. The client. The SIPC-insured management account is in the client's name and control.

Q. Are my securities sold at any time?
A. No. They are always the client's shares and they stay in the client's account. The client may sell and/or trade their securities with some restrictions.

Q. What if my account currently has a lien against it?
A. If the portfolio qualifies we can arrange to pay off the lien prior to the transfer of the client's securities into the new account.

Q. What is the minimum and maximum loan amount?
A. The minimum loan amount is $100,000. The maximum loan amount is based on the loan-to-value of the securities pledged. Note - We will not consider more securities to be pledged than the total of the three day average volume of the securities. For example if the client would like to pledge 100,000 shares of a security with a total three day average volume of 50,000 then only 50,000 shares of that security may be pledged.

Q. What is the minimum share price for my stock to qualify for this program?
A. $5.00 share price for mutual funds and a $10.00 share price for stocks. If the price of the shares is below that amount please contact us for an alternative financing method.

Q. Will this loan be reported to any of the credit bureaus?
A. No, we do not access the client's credit history and the loan is not reported to the credit bureaus and there is no public record of this loan. Should a default occur we would still not report the event to any credit reporting agency.

Q. Are these Full-Recourse loans?
A.  Limited recourse. Assets pledged can be liquidated to pay off the credit line.

Q. How are the loans repaid?
A. Borrower pays monthly interest-only payments only until such time as he chooses to pay the loan in full.

Q. What are my payment options?
A. Loan payment options are based upon interest-only monthly payments. We offer adjustable rates or
the client may convert payments to a fixed rate loan at any time at no cost.

Q. Must I make a monthly payment?
A. No. As long as there is enough room on the line of credit to cover the interest amount due for that month no minimum payment is required. If the line is at its limit then an interest payment must be made.

Q. Are fixed rates offered on these loans?
A. Yes. May be converted at any time to a fixed rate payment at no cost.

Q. Will I receive monthly statements on my account?
A. Yes, as with any large bank/investment firm the client will receive monthly statements and the client will have on-line access to the account.

Q. What happens if I default on the loan?
A. These are non-personal recourse loans so the borrower has no personal liability. The securities are liquidated should a shortfall occur.

Q. What is the penalty for pre-payment on the fixed rate product?
A. The fixed rate lines carry a "breakage fee" which only affects the borrower if rates decline. The fee depends upon how much the rate drops and how much time is left on the term of the fixed rate. This has not been a concern of past borrowers that choose to move into the fixed rate payment option.

Q. What is the term of the loan?
A. Loans are perpetual. The fixed rate loans are where the RATE is fixed for the term chosen by the borrower. 6 months to 7 years are available. At the end of the fixed rate term the borrower may convert to an adjustable rate or continue with a fixed rate loan at the current offered rate.

Q. Is there a Yearly Maintenance Fee?
A. No.

Q. How long will it take to set up this loan?
A. We can usually set it up and the client may be able to draw funds in under 2 weeks.

Q. What is the time frame on access to the loan proceeds?
A. Typically funds are available in 1-2 days after the account has been opened and the shares are transferred.

Q. Will this program work with 401k's or IRA's?
A. No. However that may increase the client's asset base and as a result qualify the client for a better interest rate.       

Q. Can you lend against annuities?
A. Depending on the contract. We will evaluate these on a case-by-case basis.

Q. Is there a minimum trading volume per day on the securities to qualify?
A. Yes-a minimum average of $50,000 traded per day.

Q. In pledging CD's how does that work?
A. CD's must be obtained through our lender. The client is not able to transfer CD's from another existing account.

Q. Are stocks the only collateral that may be pledged?
A. No, US and foreign stocks, mutual funds, US Treasuries, restricted stock , foreign sovereign debt,  corporate bonds, municipal bonds, annuities and CD's may also be pledged for this type of lending.

Q. Is this a "margin loan"?
A. No.

Q. How is this loan program different from a "margin loan"?
A.
- SBLOC typically offers a much higher LTV than a typical margin loan will.
- SBLOC is non-personal recourse. Margin loans are full-personal recourse.
- Most margin loan providers also will check client's credit.
- We do not check or report to credit bureaus. Margin lenders will check the client's credit history.
- SBLOC typically offers a lower rate of interest.
- We lend on a broader range of securities.
- We can lend on national as well as foreign securities.
- Our loan "call" is lower than a typical margin loan and gives the borrower more options should it get to that point.

Q. What is the Call point?
A. The borrower must maintain at 25% equity in the account at all times. If that amount falls below that point then the borrower will be asked to add collateral to the account in the form of cash, securities or other collateral.

Q. Once the funds are moved what restrictions are placed upon trading?
A. Some restrictions. Typically must be of "like kind". If the client sells stock and buys fixed income for example, the credit line would in fact increase.

Q. Is there a restriction on the use of the loan proceeds?
A. A borrower may do anything with the loan proceeds he chooses except to purchase other securities

Q. Would this be classified as a taxable event?
A. This is a loan so typically it is not considered a taxable event. If in doubt consult a tax advisor.

Q. Who is the lender?
A. We work with a top-tier US Bank/Investment firm and all accounts are SIPC- insured. Once we move along further in the process you will be speaking with a ChFC officer of that bank.

Q. How long has the lender been in business?
A. For over 75 years.

Q. Why must I move my account from my current brokerage firm?
A. The lender requires that they are able to oversee the collateral. They are a top-tier US Bank/Investment firm and all accounts are SIPC insured.

Q. What is the difference between SBLOC and SBL Product?
A. For a Program Comparison Chart Click Here

Q. How do I get a quote?
A. Click Here

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