Securities Based Lending

Sometimes liquidity needs arise, whether they’re planned or unexpected. With a securities-backed line of credit in place, you’ll have ready access to capital without having to liquidate your investments. You can use your marketable securities, such as stocks, bonds and mutual funds, as collateral. And of course, we’ll consider how it all fits into your overall wealth plan—balancing your short-term needs with long-term goals to create the right approach for you.

What is securities-based lending?

A securities-based line of credit can be a flexible and cost-effective way to access liquidity strategically. Whether you are looking to fund a new purchase, renovate your home or take advantage of a timely investment opportunity. Using a line of credit allows you to remain invested and keep your investment portfolio intact.

Other common uses include:

• Real estate purchase
• Expenses such as taxes
• Specialty assets such as yacht, art, or stadium finances

Benefits that can make a securities-based line of credit a valuable complement to your investment portfolio:

• Stay invested. Keep your investment plan and asset allocation in place without disrupting your long-term strategy
• Financial flexibility. Quickly access liquidity for a range of uses—whether you’re meeting large financial obligations or seizing an opportunity
• Cost-effective. There are no setup fees, and only the funds you use incur interest charges, which are often lower than other financing options.
• Potentially tax-efficient. A securities-based line of credit can potentially be structured in a tax-efficient way, which may allow you to more effectively grow and preserve your wealth.

As with all investment decisions, it’s important to understand the risks of borrowing before moving forward. Events beyond your control, like market fluctuations that may reduce the value of your pledged securities, could lead to a margin call. We’re here to help you make the best decisions for your needs. Today and in the future.

How does it work?

As a client, you have the ability to borrow the sum total of the Lending Value of the securities in your account. A Lending Value is a percentage of each security’s market value and represents how much The Etherious Family is willing to lend against the asset. Lending Values are subject to change without notice.

There are two types of Lending Value:

• Initial Lending Value (ILV) is the maximum amount that could be borrowed against your portfolio. ILV determines how much you can draw from your line, and whether collateral can be released or substituted.
• When there is no release or substitution of collateral, Maintenance Lending Value (MLV) determines how much equity you are required to hold in your portfolio. Therefore, market depreciation may not cause an immediate margin call. A security’s MLV is typically higher than its ILV. MLVs are set at The Etherious Family’s discretion up to regulatory thresholds.

Important Information

This material is for information purposes only, and may inform you of certain products and services offered by private banking businesses, part of The Etherious Organization. Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your The Etherious Family team or email us at The.Etherious.Family@Etherious.Org for assistance. Please read all Important Information.

GENERAL RISKS & CONSIDERATIONS

Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your The Etherious Family team.